Trading as a part time profession.
- Thread starter rajendrani
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Dear Ankit,
As promised, that I will tell you about the pivots, find the below pic and information and use it for your trading method or make changes using those to suit your trading style.
This will help you to decide the filter value and to decide how to use them.
Before going on the pivots, Let me start with the filter so that its easier for you to understand the rest easily.
Filters: Small and Big
In the above example using the pic, I am going to show you how we choose filter for next day. As the trading ranges decreases when the market is down and it increases when market is up, so we also will try to change our filter accordingly so that we dont get whipsawed by using a very small filter or dont get any trade because of very big filter.
To get the filter for next day trades using the 5 min pivot method, we switch our charts periodicity to daily charts and in that we click on the ATR indicator. It will give a particular value. We will use this value to find our filter.
For eg: In the above chart, The ATR for nifty on 17th March, 2009 was 86.41
So, we will use 10% of the ATR as our small filter and use 15% of ATR as our big filter.
So, Small filter as 10% of ATR = 8.6
And Big filter as 15% of ATR = 12.96 approx~ 13.0
Now, why do we need two filter, big and small and how and when to use them.
In 5 min chart we will have many pivots, we have to identify the good visual pivot and change our SAR or our entry point to that level, These visual pivots may be strong or weak, so in order to prevent ourself from wrong entry we will be using this two different filters.
For strong visual pivots we will be using small filter
For weak visual pivots we will be using big filter.
For sideways congestion pivots use big filter.
Strong Visual Pivots
In the above pic, we see a clear pivot visual pivot, as the next two bar has a Lower low and a Lower High, and both the bar is of same colour which is red means the price has gone down. So the Pivot high what we have here is a strong visual pivot.
Small fiter to be used for this kind of pivot
Weak Visual Pivots
In the above pic, we have a weak visual pivot, as the next two bar following has a clear Higher High and Higher Low, but both this bar is of different colour one green and one red, means price went up in the first bar and then came down. So, this pivot what we have here is a weak visual pivot.
Big filter to be used for this kind of pivot
Sideway congestion Pivots
In the above pic, the picture says it all that we have a sideways movement, So we will not be considering any of the high and low as pivot high or pivot low instead we will just combine all this high and low and put as the highest high as our pivot high and the lowest low as our pivot low.
Big filter to be used using this kind of pivots.
I hope I had answered your queries regarding the strong and weak pivots and additonal on how to get the filter value.
Thanks and regards,
rajendrani
As promised, that I will tell you about the pivots, find the below pic and information and use it for your trading method or make changes using those to suit your trading style.
This will help you to decide the filter value and to decide how to use them.
Before going on the pivots, Let me start with the filter so that its easier for you to understand the rest easily.
Filters: Small and Big
In the above example using the pic, I am going to show you how we choose filter for next day. As the trading ranges decreases when the market is down and it increases when market is up, so we also will try to change our filter accordingly so that we dont get whipsawed by using a very small filter or dont get any trade because of very big filter.
To get the filter for next day trades using the 5 min pivot method, we switch our charts periodicity to daily charts and in that we click on the ATR indicator. It will give a particular value. We will use this value to find our filter.
For eg: In the above chart, The ATR for nifty on 17th March, 2009 was 86.41
So, we will use 10% of the ATR as our small filter and use 15% of ATR as our big filter.
So, Small filter as 10% of ATR = 8.6
And Big filter as 15% of ATR = 12.96 approx~ 13.0
Now, why do we need two filter, big and small and how and when to use them.
In 5 min chart we will have many pivots, we have to identify the good visual pivot and change our SAR or our entry point to that level, These visual pivots may be strong or weak, so in order to prevent ourself from wrong entry we will be using this two different filters.
For strong visual pivots we will be using small filter
For weak visual pivots we will be using big filter.
For sideways congestion pivots use big filter.
Strong Visual Pivots
In the above pic, we see a clear pivot visual pivot, as the next two bar has a Lower low and a Lower High, and both the bar is of same colour which is red means the price has gone down. So the Pivot high what we have here is a strong visual pivot.
Small fiter to be used for this kind of pivot
Weak Visual Pivots
In the above pic, we have a weak visual pivot, as the next two bar following has a clear Higher High and Higher Low, but both this bar is of different colour one green and one red, means price went up in the first bar and then came down. So, this pivot what we have here is a weak visual pivot.
Big filter to be used for this kind of pivot
Sideway congestion Pivots
In the above pic, the picture says it all that we have a sideways movement, So we will not be considering any of the high and low as pivot high or pivot low instead we will just combine all this high and low and put as the highest high as our pivot high and the lowest low as our pivot low.
Big filter to be used using this kind of pivots.
I hope I had answered your queries regarding the strong and weak pivots and additonal on how to get the filter value.
Thanks and regards,
rajendrani
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