MFS: Are you still using "pivot points"? I don't know who Mobius is/was from your reference a couple of months ago, but I was running a search on the term pivot points and your post came up.
I'm sort of updating my arsenal of TA tools and recently came across pivot point analysis. It seems the term comes up pretty often, but I am wondering if people are referring to a particular method or just the use the term when discussing any pivotal point.
The method I am referring to is one for calculating numbers to find support and resistance levels, in advance of what chartists are able to "see". The formula I got came from Neal Weintraub, a floor trader in Chicago, who has a newsletter and book, The Weintraub Daytrader.
I am leery of anything published this year regarding trading, because of all the fools jumping on the bandwagon pretending they actually know something about the subject, but a recent reading of Daytrading Systems and Methods by Beau and Lucas, 1992, seems reliable. They have this to say: "We suspect that the popularity of these pivot points is causing them to act as self-fulfilling prophecies..we think these points only work because they are popular and that popularity may be short-lived. If they should stop working for awhile, because of some more important factors, they may never work again and you can throw this method away forever. On the other hand, if more people follow them, as time goes on they will work better than ever."
Feedback anyone? I see alot of attention going toward the primitive Gary B. Smith method of quickie chart analysis and wonder if that may be displacing some of the old standby methods of experienced floor traders. I like knowing of some ways of doing TA without always relying on a chart, but since it's all about crowd psychology, why bother if the crowd's dispersed, right? |
