Profiting With Pivot Based Concepts

Profiting with

Pivot-Based Pivot Based C Concepts t Frank Ochoa PivotBoss.com

with

A Powerful Approach Approach…

Trending Here

Buy Here Sideways Here

Agenda Profiting g with Pivot-Based Concepts p •Pivot Trend Analysis –Buy Support Support, Sell Resistance

•Pivot Width Analysis –Forecasting F ti P Price i B Behavior h i

•Introduction to Pivot Relationships –Higher Value Relationship –Lower Value Relationship –Inside Value Relationship 3

Pivot-Based Pivot Based Concepts Pivot Trend Analysis Pivot Width Analysis Pivot Relationships

Why are Pivots Useful? • Price-based Price-based, MarketGenerated information • Help identify value value, overbought, and oversold conditions • Leading indicators; zero lag g • Lead to a self-fulfilling prophecy • Can be used for a wide array of analysis

Market Profile Floor Pivots Levels

Camarilla Pivots

R2

H5

R1

H4

VAH

TC

H3

POC

PP

VAL

BC

L3

S1

L4

S2

L5

Pivot Trend Analysis Buy Support in an Uptrend, Sell Resistance in a Downtrend

Pivot Trend Analysis • Buy y at support pp in a bull trend • Sell at resistance in a bear trend • Keeps you disciplined to the trend • Certain pivots become “retired” during a trend • Focus on higher probability b bilit reversals l

Buy Support in a Bull Trend

Buyers entered at the pivot range

Buy Support in a Bull Trend

Buy Dips at Support in Certain Pivots Become Bullish Trend “Retired” During Strong T d Trends

Sell Resistance in a Bear Trend Sell Here

Sell Resistance in a Bear Trend Sell Here Close Above Range Breaks Downtrend

Sell Resistance in a Downtrend

Sell Rips

Buy into Morning Weakness

Buys Dips at Pivots, Goal is a New High

Pivot Width Analysis Trading Range Behavior

Trending Behavior Narrow

Wide

Forecasting with Pivot Width • The price behavior of a prior period i d off time i can h help l fforecast the price behavior of an upcoming period of time • An Unusually wide pivot range can forecast sideways trading • An Unusually narrow pivot range can forecast trending and breakout markets • Allows you to anticipate potential market behavior • Allows you to choose which markets to trade

Research In Motion

Game Plans for Narrow/Wide Days

• • • • • • • •

Sideways Markets Play Reversals g Stops p Tight Close Targets or Stand Aside Trending Markets Play Breakouts Loosen Stops Bigger Targets Look to be “In”

Apple Inc. Apple, Inc

Revolving Nature of Pivot Width

Mini Sized Dow

Open Beyond Range/Value Indicates Major Movement Ahead

Narrow Ranges = Big Potential

Open p Beyond y Range/Value Indicates Major Movement Ahead

22

7 Pivot Range Relationships Higher Value

Overlapping Higher Value

Lower Value

Overlapping Lower Value Inside Value

Unchanged Value

Outside Value

Why are Pivot Relationships Useful? • Allow you to gauge market strength/weakness • Allow you to anticipate potential price behavior • Allow yyou to focus on the best trading candidates • Keep you disciplined • Force you to do your homework • Allow you to plan your trades

The Higher Value Relationship Higher Value

Higher Value • Most bullish relationship • Occurs when the pivot range is completely higher than the prior session’s pivot range • Look to buy at support in a bullish trend • Buy into weakness, sell at a new high within the trend

Higher Value Relationship

Higher Value Relationship

Buy at Support

Higher Value Relationship

Higher Value: Buy at Support

Failed Higher Value

The Lower Value Relationship Lower Value

Lower Value • Most bearish relationship • Occurs Occ rs when hen the range is completely lower than the prior range • Look to sell at resistance in a downtrend • Sell into strength strength, with a target of reaching a new low within bear trend

Lower Value Relationship

Lower Value Relationship

Lower Value Relationship Lower Value Relationship

Sell at Resistance

Lower Value Relationship p

The Inside Value Relationship Use Identify the Pivots the most to trade explosive breakaway breakout days days

Inside Value Relationship Inside Value • Most M explosive l i relationship l i hi • Occurs when current range is completely inside prior range • Look to trade a breakout from price range • Initiative participants step in and aggressively push price to new value • Loosen stops, trade for bigger profits • Trend morning, or trend day scenario may occur

Inside Value

Mini Sized Dow

Open Beyond Range/Value Indicates Major Movement Ahead

The Inside Value Setup

Inside Value Relationship

Identifying an Inside Value Setup

Result of the Setup

Price opens beyond range and value, i di ti b indicating buyers are aggressively seeking new value

Inside Value Breakout

No gap, so must wait for breakout from price range

Inside Value Breakout

Trading with Discipline • Use the pivots to develop a theory for market direction and behavior • Identify the best entry and exits points before the market opens • Let the market prove or disprove your theory • Do your homework • Trade with confidence and e ec te your execute o plan 42

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Profiting with

Pivot-Based Pivot Based C Concepts t Frank Ochoa PivotBoss.com

with