Pivot Point Reliability

[cowcool 10]

Is pivot point, P = (H + L + C) / 3 reliable for determining initial support/resistance level for Eminis? I mean does price usually bounce up/down when it hit pivot point at first attempt?

 

Thx!!

[Tams 20]

Is pivot point, P = (H + L + C) / 3 reliable for determining initial support/resistance level for Eminis? I mean does price usually bounce up/down when it hit pivot point at first attempt?

Thx!!

 

 

 

instead of looking for a Red Light / Green Light answer...

 

think about the principles behind price behavior.

 

WHY would the price bounce?

 

if not, WHY NOT?

 

if yes, under what circumstances will the price bounce?

and under what circumstances will the price NOT bounce?

 

 

if the price supposed to bounce, but did not, what message the market is sending you?

Edited May 5, 2009 by Tams

[sevensa 10]

Is pivot point, P = (H + L + C) / 3 reliable for determining initial support/resistance level for Eminis? I mean does price usually bounce up/down when it hit pivot point at first attempt?

 

Thx!!

 

Some people will say yes, some people will say no. You would be much better off testing it and see for yourself.

[brownsfan019 17]

All I can say is that if they worked 100% of the time, everyone would use them. In other words, some days they work like a charm and other days it's as if they don't exist.

[Harlequin 10]

In my experience I would say pivots act as support and resistance. However that may cause a bounce or just a consolidation before continuation. Coming up with a successful strategy to trade pivots will not be easy. IMO Tams gave good advice, observe what happens at pivots and you can learn a lot about the market action of the day.

Edited May 5, 2009 by Harlequin
mistake

[Trader333 10]

In my view you need to use price action in and around pivots along with a confluence of other factors and then trade based on that.

 

 

Paul