S1 Pivot Play With Higher Lows

[Soultrader 12]

I am starting to place further importance on the S1 and R1 pivots. They seem to be good reversal points for price lately and I will start keeping data on them from now on.

 

Here is a little setup which I found interesting in hindsight. I had personally exited way too earlier. It combines a S1 pivot with Torero's core of understanding higher lows or lower highs.

 

Price tested the critical 00 level smack at the S1 pivot. Then it went to to make a second test failing to test the 00 level and instead made a higher low. Price then took off towards the weekly pivot, broke it and used it as support. Then it went on to rally for 50 pts (S1 to VAL) towards the value low pivot. Pretty impressive.

[torero 10]

As Bruce Lee (now mutilated in context by BMW) once said, "Be water, my friend," so I say "Be the wave, my friend";)

[Anonymous 11]

I am starting to place further importance on the S1 and R1 pivots. They seem to be good reversal points for price lately and I will start keeping data on them from now on.........

 

 

It's funny how some of the simplest things work best. Key numbers, aka floor pivots, work very well despite the fact that so many people use them. Some would say this is why they work. Yet those same people would decry the over publication of a method because over use would render its edge useless.

 

What I like about pivots are that the create a "playing field". That is, they allow one to see where price is. More importantly, they force the Professional Money to show themselves at certain areas on the chart. Here is today's (Friday 2/2/07) action in the Euro.

 

The thin blue line is R1 and dashed white line is Point Of Control (POC). If you can read price and volume, you can see that the Smart Money is dumping supply as price moves up towards and then thru R1. The red arrow points to an up-thrust. Note how price moves above the key level but closes on its low on volume less than the previous two bars and on a wider range. The Professionals look to suck in late longs at the "pivot" level, as they intend to take prices lower. They do.........