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Thursday, January 3, 2008

Using Pivot Points for Targets

When calculating pivot points, the pivot point itself is the primary Support/resistance.This means the largest price movement is expected to occur at this price.The other support and resistance levels are less influential, but may still generate significant price movements.

To Calculate Pivots in MS Excel:.

Column, values to enter, formulas U have to enter

A = Company Name/date
B = Open
C = High
D = Low
E = LTP/close
*Volume is not required in calculation of pivots

F = Pivot Number = (High+Close +Low )/3 [u can also include "Open" Value also so it will be = (Open+High+Close+Low)/4],so formula is =(C2+D2+E2)/3

normal trading range
G= Resistance 1 = 2*Pivot number-Low,so formula is =(2*F2)-D2

H= Support 1 = 2*Pivot-High ,so formula is =(2*F2)-C2

for volatile trading range:
I= Resistance 2 = Pivot+(Resistance1-Support1),so formula is =F2+(G2-H2)

J= Support 2 = Pivot-(Resistance1-Support1),so formula is =F2-(G2-H2)

for extreme trading range:
K= Resistance 3 = High+2*(Pivot-Low),so formula is =C2+2*(F2-D2)

L= Support 3 = Low-2*(High-Pivot),so formula is =D2-2*(C2-F2)

Target for next trading day
M= Resistance 2,so formula = I1 (previous days Resistance2)

Support for next trading day
O= Support 1,so formula = J1 (previous days Support1)

Tips to use in Intraday-Trade:
for bulls:

if a stock goes above R1 then he can buy above the R1 with stoploss at S1
if a stock falls below S1 (and finds support there),then he can buy above the S1 with stoploss at S2

for bears:
if a stock falls below S1 then he can Short sell with stoploss at R1
if a stock goes above R1 (and finds Resistance there),then he can Short sell with stoploss at R2


Important
Pivot points enables trader to quickly calculate levels that are likely to cause price movement. Pivot points are short-term trend indicators, useful for one day only,then they need to be recalculated.The success of a pivot-point system, lies only with the trader,with his/her ability to effectively use the pivot-point systems with other forms of technical analysis.

12 comments:

Uma said...

this works well, if only we learned to trust TA and not get confused with the mixed signals (noise) that market sends our way!

geniusjaggu said...

wat if TA is confused..trust me...

mkt is always right..Analysts everytime wrong...

Uma said...

hehe true!

OT said...

Nice lucid write-up on Pivots; I'm trying it today GJ. But this ICICIDRECT is not opening. :(

OT said...

Dear Rajiv - that's a fantastic collection of write-ups on TA. You have put a lot of work into it - I can only bow my head in reverence.
OT

geniusjaggu said...

OT dear,
i m happy,u liked formulas...i hope they will work for u too...

happy profits...

OT said...

You are linked here

geniusjaggu said...

thank u OT dear :)

sriram said...

WHT ABT MIDPOINTS HOW IT WORKS CAN U GIVE ME THE FORMULA

Kuwar said...

This is very nice way to found support and resistance. Does they it working in day trading? I am not raise doubt, but I want to know your opinion. I like to recommand intresting stuff can found on Technical Analysis So one can become independat inday trading rather than fun behind TIPS.

Vijay Reddy said...

enjoyed reading it. I need to read more on this topic...I admiring time and effort you put in your blog.
pivot point calculator

Pratap khanna said...

Nice Post! Thanks for sharing great information about free Stock Market tips & Technical Analysis / Fundamental Analysis Training!