Friday, October 23, 2009

Resource for Identifying Significant Price Levels

In recent posts, I've been highlighting resources for journaling and tracking performance. Regular readers know that I use Twitter as a resource for staying on top of the market as part of preparation for the trading day. That includes identifying proprietary daily and weekly profit targets that are adjusted for recent market volatility.

Another nice resource for identifying pivot levels--as well as moving average points, value areas, support/resistance, and much more--is the Pivot Farm site. The levels for stock indexes are provided free of charge and are a great way to review markets and the broader context of trading. Levels are also provided for currencies. It's a useful and well-organized resource.

1 comment:

Matt Fahmie said...

For some reason, I cannot see the value in pivots. The market does not generate these numbers, they are a calculation created by the user. There are also a myriad of ways to calculate them depending on who one talks to. If you add the multitude of other "non market generated" numbers that people use every day based off some type of calculation, moving average, gann line, weekly, monthly, yearly pivots, squares of nine, fib numbers, those odd fork lines I see some use, and Drummond Geometry(which I hear at least has some logical merit)just to name a few, all I believe it does is give continuous mixed signals. Instead of helping the trader, he is frozen between conflicting information. i.e. "I am at this pivot, but it doesn't line up with this fib number that everyone considers important, but the pivot was given to me by a credible source"... and by the time he makes up his mind, he has hesitated and the opportunity has passed.

Obviously, Dr. Steenbarger you know I am a strong advocate of Market Profile, so I might be a bit bias. But, I believe the market itself generates more than enough reference points to trade effectively off of. If one looks at a chart he can see: Prior highs and lows, afternoon pullbacks, settlement, high volume nodes, current highs and lows, trading range highs and lows, areas that lack volume (minus development), half back, gaps, globex highs and lows, globex inventory positioning, and weekly/monthly bar chart historical reference points. Everyone one is a creation of the market. No calculations, no astrology or predictions. Everyone holds greater significance than any calculation or computer projected level that one pumps out in my opinion. From the ones I have stated just prior, I believe there are more than enough to strategically plan and execute correctly. The creation of non market generated information(technical controls) has no basis in reality.

The multitude of these technical controls that flood the average traders screen from a myriad of sources he listens to (because he cannot yet trust himself to generate ideas and execute correctly) only leads to hesitation and thus missed opportunity.

I would love to know your thoughts on my above statement. This was just meant to be constructive criticism and nothing else. An intellectual discussion.

With much respect,

-Matt Fahmie