ATR and Pivot Points

[earsha 10]

Whats is ATR?

 

ATR means Average True Range, will give you some idea of how much the stock price may move in a day between the Low Of Day (LOD), and High Of Day (HOD). If the charts are right as the price is coming up off LOD (or some intraday support near it), you`ll have an idea of how much profit potential there is in trading it to HOD (or some intraday resistance near it).

 

Pivot Points?

 

Pivot points are yet another useful tool that can be added to any trader's toolbox.

 

Here, "S" represents the support levels, "R" the resistance levels and "PP" the pivot point.

 

Daily Pivot Points will give you intraday supports below the Pivot Point, and intraday resistances above the Pivot Point. These change daily. The Pivot Point represents "neutral" price. If the price drops below PP, then the bias (tendency) will be for the price to drop further. If the price rises above, then the bias (tendency) will be for the price to rise further. In otherwords, the lowest risk for long trades is entering when the trend is turning up off of the PP, or moving up thru R1 towards R2. The lowest risk for shorts is to enter when the trend is turning down from PP, or moving down thru S1 towards S2.

 

 

Earsha

[Soultrader 12]

Very informative and well explained earsha. Im going to be making a table of contents for the forum and will include this post as well.

[earsha 10]

thankyou soultrader, also i seen your "Pivot Points Calculating methode", very impressive, most of your posts are informative, make this forum a nice one for newbies...thanks again...

 

Earsha

[Samurai 10]

Anyone know of a source that provides these ATR figures for Futures markets?

[TinGull 10]

What charting software are you using Samurai? Usually charting software will have some sort of range indicator.

[Samurai 10]

What charting software are you using Samurai? Usually charting software will have some sort of range indicator.

 

 

Market Delta, but I am very new to it.

[TinGull 10]

Are you only using Market Delta? Or an InvestorR/T package branded by Market Delta?

[Samurai 10]

Just MD with E-signal Data Manager. Any guidance is much appreciated. Tks.

[TinGull 10]

Gotcha in the chat room. Welcome!

[Griesha 10]

Pivots are great. I have been using them for some time now and have code within eSignal to automatically calculate and plot them from previous day's data.

 

HOWEVER, these "calculated" pivots often don't align with those that floor traders use (based on the previous day's trading on the FLOOR, not on the electronic market).

 

In my experience, the usefulness of the floor numbers far exceeds the numbers calculated from electronic trades.

 

So I have a question. Does anyone know where to find these numbers, before market open, and NOT from a paid site? (These numbers are easily accessible from sites charging $200 -500/month. Often these numbers are more useful than the rest of the "service" being paid for!).

 

Any help in this area greatfully appreciated.

 

G.

[TinGull 10]

Welcome to TL! Out of curiousity, how do you know the floor pivots are different? Also...eminis aren't traded on any floor. It's purely electronic. The YM follows those pivots with real accuracy, and ER usually gives a little leeway to them. No idea about NQ or ES as I've never put a contract into either of those markets.

 

Love to know what kind of differences you see. If you have a chart or a formula with how floor traders are calculating them, let us know

[ezduzzit 10]

Hmmmm.. to my knowledge there is no major difference and I doubt many retail traders have access to any new pivot schemes used by floor traders on trading the parent instruments on which the e-minis are designed. There is of course opportunity for occasional meaningful differences in one person's pivot calcs versus those of another depending on whether or not they include the globex overnight sessions into their numbers, but most often there are not wide swings in the thinly traded overnight sessions.

 

I suppose there are also those who use the variable pivot calculations that adjust every 60 minutes based upon trading levels within that same day, but I don't find many traders using those.

 

Since the minis, as pointed out just above, don't trade on a live floor exchange, I don't see why you would want to get hold of those "floor" pivots and substitute them for use on your e-mini charts.

 

Many traders don't even bother with those old calculations and use market profile or volume profile levels or just simple dual purpose trendlines which run through the high activity points of support and resistance over the prior two or three trading days or periods.

 

As usual, there's a little something for everybody, depending on their style of trading, but support and resistance is fairly obvious on prior day's charts and I think it is less important exactly how you come up with it than it is to see if those points are often respected in your current day's trading.

 

Happy Trading

[Sniper 10]

Pardon me if I am playing devil's advocate here. But here I go

 

Yes there's a difference between timing on the floor and trading electronic. But is so little you won't even notice. Maybe a floor trader is 1 tick high or low from an electronic pivot but in my calculations (as I did when the e-mini's craze started around 2001) the deviation was around .005%.

 

If somebody is out selling a " floor pivot point signal" service I will be cautious on that.

 

My two micro cents