October 26, 2011
- in Uncategorized by schooloftrade
Pivot Levels vs. Auto Levels Indicator
Trading w/ Pivots
– Pivot is a technical level of support and resistance
– Pivots are calculated many different ways, but the most common is using the Open, High, Low, and Close, and then using a mathematical formula to draw ‘pivot points’ on your charts.
o This calculation is similar to how a Fibonacci calculation is used.
o There isn’t any real REASON, other than the calculation.
– Pivots, just like Fibs are CALCULATIONS and I don’t TRUST something that is not TESTED.
I never know when to trust the Pivots or the Fibs, so I developed the AUTO LEVELS.
Auto-Levels Indicator takes those fibs, pivots, VAH, VAH, other calculation, moving averages and the levels that HOLD are the ones that I use.
Which auto levels have the highest percentage trades with them?
– Sell the highs of the range
– Buy the lows of the range
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– Average of the ‘true range’
– Average over (14) periods/candlesticks of the true range
– Measures the range in the market.
– I want ATR = Rising Higher
– Remember that sometimes when the market is on a ‘tear’
o High speed
o High volatility
o High ATR
§ It MAY be too dangerous to trade
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3 Price Patterns:
– Wave
o Needs to be making new higher-highs
o Needs to be a breakout pattern
o Avoid flat trigger lines
o Taken at the extremes (highs or lows)
– Breaker
o Use the swing high as your entry trigger
o Beware overbought/oversold momentum that will make this pattern higher risk.
– 2-Step
o TREND-reversal pattern
o Uses swing highs/lows for entries
o Should always be taken against the short term trend.
§ Look for 3 signs of price reversal
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– Watch the new lesson in the advanced course about this pattern
– Watch the video lesson on the blog
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Wave Trade Plan in the Advanced Course:
– This is the MOST effect method of trading that I know of
– You can download this in the advanced course
– I keep it updated whenever I make changes
– 3 profit targets
o Use your trigger lines and auto levels to plan your targets.
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Book on Market Profile: (Dalton) Mind over Markets
– Very technical book
– You can learn the same info in our intermediate course
–
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– Add a trend to ALL your charts w/ Global drawing objects
– Use the CHART TEMPLATES that I give you as a member and that will have all of this done for you.
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How do you know when you are trending?
– Lower-lows
– Steep SLOPE to my trigger line (not flat)
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Do the 3 price patterns work on any market? Any timeframe?
YES!
– The faster the timeframe the more frequent the patterns will be, and therefore, you will have more options for patterns every day
The faster timeframes have LOWER percentages b/c the faster charts are more ‘whippy’ and volatile.
