Pivot Points

[DESKPRO]

Been looking at using Pivot Points for the Dow Daily ; sell at R1 and buy at S1. Backtested it usibng last 4 weeks data for Dow and looked promising (Dow has been oscillating in range). Was wondering if anyone uses Pivot points for longer than a month and what the results have been like. Thanks in advance

 

[rossored]

I tend to find that they dont work too well on the Dow, but this is just my opinion. I do feel they work well on the Spoos, and to a lesser degree on Nasdaq, however.

 

[adrianallen99]

Pivot points can be useful and it is well worth calculating them before you trade, but I wouldnt recommend basing your trade solely on them. Better to have another indicator or a good knowledge of the markets so you know in what circumstances it is likely to perform,.

 

[chump]

Just from observation the pivots appear to work best on range days. Trend/directional days forget it.

Cheers

 

[DESKPRO]

I agree from my observations it works best on range days but then there is no indicator that works everytime. Certainly from the DOW observations I would expect that by using stop losses and good money management I will cut my losses on the trend days. I like Capital Spreads in that it allows you to specify new buy and sell orders which is useful when you are not able to watch the market every second. What I dont like about them though is that the default stop loss is 80% of the remaining account . If like me you cant watch the Dow then this is not good money management!! Is there a spread company that allows you to specify new orders online but with a smaller default stop loss ?

 

[adrianallen99]

I know IGindex allow you to specify a stop level when you phone through, have you tried phoning them and asking them to put a x% stop on the particular trade?

 

[MikeW]

Deskpro,

CapSpreads lets you change the 80% stoploss level immediately after it's the position is setup - to within certain distance limits of the opening position but much tighter than the std.

Rgds.
Mike

 

[DESKPRO]

Yes I was aware of that but my problem is I am not be able monitor the trade always so if order has been filled and I am not there to change my stop loss I could potentially loose a huge chunk of my money with the default 80% stop loss.

Its almost delibrate that they set such a hugh default % stop loss

 

[DESKPRO]

FYI:

Spoke to Capital Spreads regarding the default 80% stop loss. they suggested a way around it would be t place a buy and sell trade at the same time eg if wanted a sell at 10700 (using new option) and wanted a stop loss of 25 points then also set a new buy trade at 10725. In effect then have a stop loss of 25 points. Their default stop loss trade would also be set (greater distance from 10700) but my buy would be hit first so theirs would also get cancelled .

 

[TheBramble]

So they're recommending you open 2 physical trades for each one you want to do.

Unless they're only going to charge you the one spread, this is quite good business for them.

 

[DESKPRO]

Is this different from if I was stopped by their default stop order??

eg If put a new sell order at 10700 then this would get executed when their price is 10700-10705. Their default stop loss would be say at 10860 ie when price quoted is 10855-10860. If I had put another new order at 25 points then would have been stopped when their price is 10720-10725

 

[Thirteen]

pivots are for the pits. big in chicago. thats why it dont work on dow - cos its not traded in a pit, but may work on spoo cos that still is (not the mini) anyway, imo, everyone knows bout them now so less effective

 

[JJL3142]

Pivots

Is there any recommended pivot point articles ?

I had read an article about 6 months ago (cant remeber the author) which was useless ..


Thanks

P

 

[DESKPRO]

Try http://www.pivotpoints.co.uk/

 

[TBS]

pivots are for the pits. big in chicago. thats why it dont work on dow - cos its not traded in a pit, but may work on spoo cos that still is (not the mini) anyway, imo, everyone knows bout them now so less effective

Basically agree with you - however, diferent people use different formulae to come up with pivots - especially once you get away from r1/s1.

BTW Dow futures are pit traded, same as the big spoos

 

[DESKPRO]

Aren't the daily dow spread prices somehow related to the dow futures??? thats what the SB companies have told me in the past.

What are the big spoos??

 

[TBS]

Aren't the daily dow spread prices somehow related to the dow futures??? thats what the SB companies have told me in the past.

What are the big spoos??

The 'big spoos' are the main S&P futures - worth $250 per full point and traded in 10ths - as opposed to 'mini spoos' which are traded electronically are worth $50 per full point and are traded in quarters.

SB isn't my thing, but from previous conversations I understand (and could well be very wrong) that the SB's have a 'formula' which produces a synthetic price. During the day it is more akin to dow cash (if that is what you are specifically trading) then switches to basis the futures out of hours (as there is no cash market to compare)