iCharts Discussions

[ConMan]

Hi

I wish you share with you some nice observation that I have been noticing for the past few months .... I thought of posting the same some time back but couldnt.

The method uses the Pivot Points (calculated & available readily in jcharts(premium)). We will first concentrate on Pivot Points - Monthly.

If you notice the chart attached below ... (little condensed,please zoom) ... there are 3 lines ...

green line is the resistance line (R1)
blue line is the pivot line (PP) and is most important
red line is the support line (S1)

Please note I have take only R1/S1 & not more than that.

Trade Strategy

We are typically topic of a swing system here (intra system post this)

Watch out for a candle close of 1st trading day of the month ... and see if it closes above or below PP ... the idea is simple .... keep a SL at PP and go long if 1st day close above PP & go short if 1st day close below PP.

Now the price tgt can be anything that you want it to be ... for me its 5% .. I keep Rs.1 lac as margin for 1 lot of Nifty ... the moment I get 100 points I close my position.

FAQs

1. What if the price closes too far from PP ...
You need to check your risk reward ratio ... I typically like 1:2.5 kind of trades ... So I typically take a risk of 40 points.
Say if the price closes far away ... then we wait for it to come closer to r1 or s1 .... when it is closer to r1 we sell and when it is closer to s1 we buy.

2. Is the SL intraday or on EoD close ...
Because we take postition closer to the end of the day ... the SL will also be Eod close

3. I short at R1 or long at S1 ... SL hit ... what should I do....
We try to re open a fresh reverse position everytime our SL is hit. So when Sl hits at R1 ... we buy and if it hits at s1 we sell.

4. Can I continue with the trade if my profit tgt is achd ...
One can then keep TSL and try to take home more n more .... typically then you can also go in for options ... by covering the current position and opening a new option basis the trend.

5. What if price fluctuates aroung Pivot points ...
Dont then immediately stop following the strategy .. it might happen once or twice a year ... the idea is to take home good profits with least cost. The price fluctuation will take say 20% of our total profits ... we should be prepared for it.

I have marked total of 11 trades in the chart attached below. Please do ask questions if you have ...

Regards
Chulbul Pandey
(munni badnaam mere liye hui )

[mohan.g]

Hai sir, i am new entry in stock market, your post are more usefull me sir, thanks a lot and continue more post sir, have a nice day.

[ConMan]

Another stock that I regularly trade in ... LT-1m

[ManjunathG]

hello cp sir,

very good stgy, it works for intraday trades ?


thank u.

ManjunathG

[maooliservice]

dear sir,
I am new to technical analyses can u explain me in detail (with chart) this pivot method for intraday trading

[ConMan]

Dear Manju/maoli

This is not a intraday strategy .., its positional .. you exit when you make your % returns ...

[mohan.g]

hello sir, now nifty-1m chart show price always in R2 level but not break so sell in and sl is R2, It's correct..a sir, plz post your comment sir

[ConMan]

Yes Mohan ... but you have to watch for it at the end of the day ... so around 3.15pm see if R2 is not broken .. if not then sell with SL of R2(eod)....

[maooliservice]

hello sir this R2 pivot value of daily pivot levels?

[ConMan]

No ... its R2 of Pivot Point Monthly TF

[ConMan]

Another example of pivot point trading.

Got 15points = 15*125* per lot

Regards

[ConMan]

Crude closed above monthly pivot point. Now the tgt is 3730

[sunrays]

hi cb pandey sir ........gr8 job ........i have backtested n found it be effective ....however for many who were still not aware why nifty was unable to break that 5350 level for quite sometime here is an attached chart of nifty spot 60mts timeframe used wid monthly pivots....

[sunrays]

Cb pandey sir crude did test pivot level n close slightly abv that level......but then trading a stock or commodity near a pivot cud be premeditated if not hedged .... i mean a hedge shud b ok n safe untill the direction is clear..........sir u kind insights


thank you

[ConMan]

Dear Sunrays

Good that you found it effective!

Pivot points are psychologicaly important levels. It is very simple to understand and implement and hence effective. If you get into the formula you'll understand that this is more of a momentume indicator, as it is equated by high/low & close.

So you know that if pivot point is broken, there is a good bit of momentum on the side of the breakout.

I also use weekly pivot with 60mins which I find highly effective. I shall write the details when time permits.

Till then back test monthly pivots/ paper trade on commodities/ nifty/ stocks & do share the result.

Regards
Chulbul Pandey