Critical price and support/resistance
Pivot Points are one of the classic techniques for traders and they still work on charts at all time levels. The most basic charting technique is the identification and development of pivot points.
Floor traders use pivot points to determine critical price and support/resistance levels. It is a relatively simple calculation that can be jotted on the back of a trading card for easy reference. Off-floor traders who have the luxury of looking at monitors with real-time data feeds can adopt this technique as well. The Pit Pivot system has to be understood and used properly, along with other basic and fundamental points. It is vital knowledge and a key component of our trading plan.
The KnovaWave Method is a very precise system based on time and price, fitting snugly in with Gann, Elliott Wave and money flow analysis, thereby utilizing Pivot analysis. The beauty of this system is you are prepared before the market opens and it allows for a real time pinpoint of where you expect to be, and if not, where we are likely to go. As we constantly preach, positive trader psychology is of paramount importance to a trader’s success. The preparedness from this system helps one to be able to look at the market action with predetermined levels updated in real time. Importantly, you are able to look objectively which limits the risks of second guessing oneself or one’s trading system.
The gives us a great reading of market psycholgy around inflexion points. We also utilize sentiment indicators such as:
- Market Volatility Index - VIX
- Arms Short Term Trading Index - TRIN
- Daily Sentiment Index
- CBOE put/call ratio
- Merrill Lynch’s "Sell Side" indicator
- Eliades TRIN
- Volume and Open Interest Studies