The Trend Trader helps to identify the current trend status of your favorite ETF markets. It not only helps us to stay on the right side of market direction, but also helps us avoid those without a trend. You can even use the grid as a spread matrix too - buying strength and selling weakness.
Pivot Point analysis is merely a tool and should be used with other technical indicators. It can be used to enter a trade, or exit a trade and when combined with average true range is a powerful money management tool. Once you enter a trade, you are no longer a trader, you are a risk manager and should monitor your trades on a weekly or daily basis depending on volatility. When you enter a trade assume you are wrong and let the market prove you are right. This will diminish the hubris and arrogance that is common to many traders. Please use these Pivot Points as a guide to better trading.
As you examine the work sheet, please note where there are two arrows confirming a trend. Be it long or short, a close must occur above or below two trend arrows to confirm a strong trend.
The short term trend is a three day moving average of the Daily Pivot. The long term trend is the Weekly Pivot. So we are comparing a short term moving average with a long term simple weekly average.
Remember, the 3x1 is a moving average of the Daily Pivot. If you are daytrading and the price of your commodity or financial instrument trades through the 3x1, you may want to stop and reverse.
Rules:
Price > than 3x1 and 7x5...Buy
Price < than 3x1and 7x5... Sell
Price > above 3x1 but < 7x5...minor buy
Price < below 3x1 but > 7x5...minor sell.
If you choose to ignore these guidelines, you will be a counter trend trader. There is usually more risk associated with trading against the trend.
You can use the grid as a spread matrix too - buying strength and selling weakness.
Pattern Trapper reports are compiled from sources believed to be reliable, but their accuracy cannot be guaranteed. There is substantial risk of loss in futures trading. There is no warranty, express or implied, in regards to the fitness of this information for any particular purpose. Past performance is not a guarantee of future results. All materials are copyright © 2009 by Bob Hunt. No part of these resources may be reproduced, stored or transmitted without the prior written permission of the copyright holder.
Recommended Content
Editors’ Picks
EUR/USD extends gains above 1.0700, focus on key US data
EUR/USD meets fresh demand and rises toward 1.0750 in the European session on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
USD/JPY keeps pushing higher, eyes 156.00 ahead of US GDP data
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, recapturing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming intervention risks. The focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Gold closes below key $2,318 support, US GDP holds the key
Gold price is breathing a sigh of relief early Thursday after testing offers near $2,315 once again. Broad risk-aversion seems to be helping Gold find a floor, as traders refrain from placing any fresh directional bets on the bright metal ahead of the preliminary reading of the US first-quarter GDP due later on Thursday.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price.
Meta takes a guidance slide amidst the battle between yields and earnings
Meta's disappointing outlook cast doubt on whether the market's enthusiasm for artificial intelligence. Investors now brace for significant macroeconomic challenges ahead, particularly with the release of first-quarter GDP data.