Thursday, November 27, 2008

Pivots on 100k


I have done a pass on the 100k looking for pivots (Support/Resistance) areas. They are more or less every 10 points. I will do a second pass on the 10k to refine them. We should be looking at this price levels how the price reacts. If it breaks and test -> entry. Target = At least the next pivot.
I am thinking to start with 2 contracts next week and set as first target next pivot +10 points , second target Lunch (I trade only half days).I have a theory to be confirmed of which ones are likely to reverse the price. Anyways, there is a behaviour very typical of a support/resistance area that you can see in any time frame. When the price has momentun is likely to look is breaking the pivot, but the truth is that this is either part of the momentun or stop loss (at any time frame). The important thing is that if the price goes back to the other side of the pivot, the second test as it has no momentun usually test the pivot perfectly to the tick, no kidding, and that marks what is likely a DT or DB and a nice confirmation of the reversal. Actually we can use that to identify the real pivot, we know there is overshooting or stop loss, but the second time it shows us the real pivot to the tick. There are lot of examples in the 100k chart I am posting.

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