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 holds above 1.0750 to start the week
EUR/USD trades in positive territory above 1.0750 in the European session on Monday. The US Dollar struggles to find demand following Friday's disappointing labor market data and helps the pair hold its ground.
GBP/USD clings to small gains above 1.2550
Following Friday's volatile action, GBP/USD edges highs and trades in the green above 1.2550. Soft April jobs report from the US and the modest improvement seen in risk mood make it difficult for the US Dollar to gather strength.
Gold price rebounds on downbeat NFP data, eyes on Fedspeak
Gold price (XAU/USD) snaps the two-day losing streak during the European session on Monday. The weaker-than-expected US employment reports have boosted the odds of a September rate cut from the US Fed.
Addressing the crypto investor dilemma: To invest or not? Premium
Bitcoin price trades around $63,000 with no directional bias. The consolidation has pushed crypto investors into a state of uncertainty. Investors can expect a bullish directional bias above $70,000 and a bearish one below $50,000.
Week ahead: BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.