hello traders it's Samurai trader herewelcome to my video on pivot point trading not a day goes past when I don'treceive an email or a phone call or ask the question by my students and clientsabout trading pivot points and quite often if you listen and watch my videoson a regular basis you'll see I talked about pivot point bounces etc on aregular basis so this video is to really go in depth to a degree on how to tradepivot points and a few things that you really need to know about pivot pointtrading now as always one of the risks is of course information overload nowpivot point trading or learning about pivots isn't critical but it certainlyhelps in your trading and as on a regular basis after a period of time youhave what I call AHA! moment, aha, that's how it works now I see how thatworks so I suppose what I'm trying to say here is be patient with yourself soI'm also going to go to the charts so I'll show you look at the es will lookat Pips forex market and we'll have a look of course one of my favoritemarkets in queue and we'll just see how pivots relate and how you can tradethose with those markets now if you haven't already done so please go tofull screen as very soon we will be looking at some charts of course I needto mention the risks there's always a risk in trading please feel free to haltthe video and to read the disclaimer in detail now if you haven't already done so ifyou're not already a student you can actually invest and purchase for $197 mytop 12 day trading and swing trading strategies traders trading is my passionI love trading it's what I do on my full-time day trader trader successcoach and consultant of a funds management industryI love trading and I think you probably pick that up from my videos is I trainbecause it keeps me razor sharp and it actually it's a question I probably haveevery day particularly from students that watch me trade live they say to mewhy don't you just trade full-time why do you teach well the old saying isheyou teaches learns twice when you've got a student looking over your shoulderif you're trading live let me tell you it really can make sure it really keepsyou on the straight and narrow as far as making sure that you follow your tradingrules so my trading results have gone through the roof that is they're muchmuch better I'm much more disciplined and I love the interaction with you fortrader whether you're new or experienced my course will fast-track your careerdon't go and spend thousands of dollars in waste months of time and also don'tgo and lose your trading account that is stop trading live if you're not makingmoney stop invest a little bit of money getthis invest time in learning how to trade correctly because it will justfast-track your career so that's the end of the advertisement let's get in andtalk about pivots so you may have heard this same before there are bold tradersand there are old traders but there's no old bold traders real I bring that up isthat I'm in my 50s now is I'm becoming well I'm closer for myself is fairlyconservative but I'm a day trader which means I'm willing to take a calculatedrisk and risk is all about really knowing the probabilities so I know myprobabilities some of the experienced traders watchingthis video may say look I'm willing to jump in earlier I'm willing to have asell limit order or a buy limit order right at the pivot and there are lots oftraders that do that I'm going to be showing you a more conservative methodin trading pivots that works for me and really you know as I say regularly isget rich slowly this is not about getting rich overnight but tradingpivots can be a great way of adding profitable trades or improving yourtrades now thanks to technology today when it comes to pivot trading virtuallyevery trading package now you comes with a a program that will automaticallycalculate floor pivots and plot them on your screen where the old way you stillhave to do it manually and we're going to get into the formulas in a moment butvirtually every trading package now has pivots in it floor trader pivots nowwe're going to talk briefly in a moment also about fibonacci pivots favoritefibonacci pivots are totally different than standard Fibonacci retracements etcbut we'll come to that in a moment so what is very very important thoughwhen it comes to trading pivots is because of the way the calculations workon the open high low and close is you've got to consider the timezone that youlive in around the world so so you really need to check that out now I'llbe showing you two ways that I do it on my charting package and I use a programcalled tradestation and I've actually purchased a set of pivots from Roy Kellyso I use a slightly different set of pivots what they do I just give me andI'll show you in a moment anyway we'll have a look at it on the screen so floorpivots if your charting package doesn't already have them if you go onto one ofyour trading forums that is or google it virtually you can purchase floor pivotsfor every trait for every charting package there is now and for a lot ofthem you get them free that is you on the forums somebody's already codedit and they'll pass it on to you it's just really it's a wonderful thing aboutthe Internet today so virtually so just recapping what I just said theredifferent time zones are going to have a close look up because they can reallyaffect their calculations and how they actually work now we can see on thisslide I've got on the screen you can see the dotted lines and what we've got hereis various types of pivot points where price supports and resistance and that'sreally what they do and so we can see here on another one this is on the ESthis is on the on a 5 range is you can see the pivot points and you can seehere and we'll look at this on a live screen in a moment how we bounced fromone pivot to another so what exactly are floor pivotswell floor pivots were put together many years ago by the traditional floortraders and floor pivots are the most popular pivots used in forex and futurestrading originally used as I mentioned by floor traders they're calculated inadvance so you can really call them and this is so true about pivot trading isit's a very much a leading indicator because unlike a lagging indicator whereit's a moving average which is plotting on the heavy of the past on history butfloor pivots is plotting in advance so it's very very much telling you inadvance where prices are likely to bounce and we'll see that in a momentand so as I mentioned it's really an invaluable tool to have in your arsenalof trading now you can see the calculation is there on the right andwhat we're looking at and you see the black the other P P that's a primarypivot when we trade above the primary private pivot usually that's telling uswhat we're probably going to be we've got a bias to the long side now what youcan have is trading in an oscillating market that is where you're in aconsolidating market or you're in a trading range and you're quite often seeas you will see in a moment on the screenyou'll see that we bounced in between pivots now a lot of traders wonder whyquite often the mark stops at a certain point well quite often it of course itcould be support and resistance from a previous high or low in many many timesif they don't have floor pivots on their screen big bouncing around a floor pivotarea however floor pivots are still just a tool we've got to remember that nowsupport resistance and we see on the bottom of bottom coming here supportresistant levels one to three act as targets reversal points and some traderscalculate as many as 10 support resistance areas meaning that there's 20different lines they may have on their chart now in a very fast moving veryactive market they'll trade those now we're just going to concentrate on themain pivots today the other thing we're going to consider here is which is veryvery important is the weekly and the monthly pivots now weekly and monthlypivots can have a major impact on the market as well I'll show you someexamples of that also alive on the charts so let me just move down soyou've got your standard floor pivots and then you've got fibonacci pivots soit's a total different program than your floor pivots and as I also mentionedfibonacci pivots are very very different than your Fibonacci retracements orextensions now you need to buy a specifically coded program or indicatorfor doing fibonacci pivots now personally I don't use them from my dayto day trading however I have some traders some students that use Fibonaccipivots very very successfully so it might be something that you want toexplore now let me just go back and I'm sorry if I sound like a broken record attimes but remember master your T1 T2 and T10 trades before you move on 20 ofthese okay so very very important I want to be throwing you twoinformation or getting you to jump from one thing to another now the calculationon the right hand side you can see here you can see you've got standard floorpivot calculations but then there have been adding few bit calculations into itso I'm no mathematician I'm not going to run you through the mathematicalequations for that but you can see on the right hand side and if you want togoogle it and find out more you can but fibonacci pivots for forex traders hasbeen very successful so if we look at these daily floor pivots which werecalculated by the pit traders of course in most markets now most trading is nowcarried out by computers and you've got a trader therehowever floor pivots are still very very respected and if we look at this onehere this is trading the emini and this is on the 5-minute now remember floorpivots because you're working on calculations of open high low and closeetc they work on all time frames all markets whether you're trading minutecharts range tick Renko the calculation still is the same and what we can seehere we can see off the primary pivot we've gone up we bounce off that we comedown we bounce off the s-1 we've come back down and you'll hear me talkregularly about profit targets for an example a normal logical profit targetor at least to have a trailing stop behind it here is a bounce off your S1heading back up to your primary pivot now what you do find though is of courseyou get a lot of false bounces in a strong trending market so if you've gota market that's really shorting it's falling to the downside you're quiteoften you'll get a bounce of a pivot but then it will continue through it'll comeback up and I'll show you some examples of that then continue likewise whenyou're above the pivot so here up to at least this time we had a short biased inthe market and when you above the primary pivot quite often then it'llgive you a long bias in the now we can see some examples here beforewe go to the live trade so this is just another PowerPoint slide here we can seehow we're bouncing off these pivots so we can see our biased here on thisparticular day is to the downside so you can see we've come down we've bouncedoff there bounced again gone up and then we've broken through we've come up we'veretested that it's but support down here it's broken through that becomesresistance now this is where my conservative nature comes into it and Iuse additional indicators to confirm the pivot bounce and this is where you'llhave a lot of bold traders they'll put for an example a buy limit order now abuy limit is that is an order in advance so we come down we hit that letter andthey're in the market now personally yes pivots are great to trade but quiteoften you go through them and you can get stopped into a trade which doesn'tjust doesn't work out so I prefer to use some other indicators which we'll covershortly to confirm the trade so we can see here we've broken through we've goneup tested it and away we go so you can see we've got a really short biased inthe market here now here we've got an oscillating mark that is where we're ina trading range so we can see our primary pivot here we've gone up we'vetested fallen gone up tested again we formed a little double top here thenwe're broken come down and we've bounced off the s1 now from your primary pivotsyour s1 and your s2 are your most accurate ones if you're going to go downand test those we'll go through those likewise your r1 and r2 and this iswhere it comes back that you're going to need to do some homework that is beforeyou start trading pivots you really want to be watching them for a good two orthree weeks and getting a general idea of how to trade them so I'm giving you agood overview but one thing I can't give you in thisthe session of course is the what I call the screen time that you need to gain totrade these correctly so let me give you some strategies here so pivot points usethem as support and resistance so of course you've got your swing highs andswing lows are going to form points of support and resistance then of courseyou've got as I'm talking about here is your pivot points now in some cases Itry to use the pivot points as an entry point when the price is able to breakthrough the pivot now a lot of traders they when I see price break throughthey'll automatically jump in and say if we took along side they'll buy but whatyou'll see time and time again is we're about to have a look at you'll see themarket will or basically it's almost like a a bull or a bear trap it getsthem caught in then it reverses so there's a couple little techniques Iwant to show you here so the candle close above or below a pivot point isused for trade confirmation that is how most traders use it I like to as you'reabout to see use additional indicators to confirm the trade yes that means I'mgoing to get in later and if you look at an example John Carter he talks aboutthis in his great book he's got a great book called mastering the trade but it'sjust a brilliant book he likes to have a buy stop or a buy limit order sorry or asell limit order in the market when he is getting into these trades and what hepoints out in his book is that for a lot of traders the moves half way overbecause they're waiting for additional indicators to confirm well I stillprefer the additional indicators that book by the way was written ten yearsago now I think the markets have also changed a littleanother thing with pivots it's a self-fulfilling prophecy that is becauseso many traders around the world use pivots in their trading you're going toget the bounce just from the market psychologywe've got there let's see in other cases that that's meant to betray two usersthat should be I'm missing and are they a trader sorry about that but traderuse as a pivot point as a rejection for entry into a counter trend trade you'llsee that in both cases need to use momentum indicators for confirmationwhich we'll have a look at now the weekly and the monthly pivots we'll havea look at that and you bounce off those and if anything at times they can evenbe stronger for being resistance or support so let's move on to the nextslide here and a couple of points before I go to the charts and it says theessence of day trading the pivot lies in going long when the market violates thepivot in a bull rally and going short when the market violates a pivot in abear break or a downward move so your primary pivot if you are under thatthere's a good chance and it's giving you but the market is going to keepdroppin for a period of time so it's giving you a bias to the downsidehowever in most cases we're going to wait for a pullback a retracement beforewe enter and I will show you that now I also like to use otherwise I've alreadymentioned the rule of multiple techniques now this is coveredextensively in a great book written back in 82 techniques of a professionalcommodity chart analyst page three is it what he quotes is this really just as inreal estate location Location Location in trading highlight to verify there ifI verify now what that book talks about or what's what's written in that book isthat if you have an indicator it's a good indicator that say gives you amarket advantage of 10 percent if you have multiple indicators that are eachgiving you that are totally different that is you don't want to have them allas momentum indicators are basically modeling each other but if you've got anumber of indicators that are confirming that trade it improves the probabilitiesof that trade and I like to improve my probabilities by usingmy key setups such as full candles or reversal candles so when I'm tradingpivots I want to make sure that I've got what I call a fork and or lower River orreversal candles that is that a point in my trade direction of course we use thet1 plot for that and for traders that have got the trade that might try ourtradestation indicators or for others you know exactly how the t1 plots andWhy plots that will give you an advantage I love divergence using eitherthe t19 of a t89 when I hit a pivot if you've hit a pivot and you've gotdivergence that's that's a trade you're going to take every day of the weekanother thing that you'll see is angulation now angulation goes hand inhand with divergence and in my course of course you you learn all about this butangulation dramatically improves the chances of that trade you have the zerolag confirm if you don't have a zero lag of course you're using the whole movingaverage so that rolling over so you can see here I'm looking for a number ofthings to help confirm the pivot bounce so while I'm looking for is a breakthrough a pullback and then that for the trend to continue so what I'm now goingto do is go across to some charts and let's have a look at some live on thescreen okay so what we're looking at here trade is is the NQ one of myfavorite markets the 133 tick bar now irrespective of the market your trade itworks as I mentioned earlier on all time frames with your trading time volumebars tick Renko range it works on all because the calculation on pivots hasnothing to do with price or via current price action and you can see here thatlet me just go here that if we go right to the the end of today today's by theway it's a Thursday / 16th down under here in Australia see themarket closes here and has reopened at 8:00 a.
m.
and you can see here a pivotwhich is this dotted line here has already plotted we've already had aminor pivot bounce but let me go back to my trading from today and we can seehere and let me walk you through some of these pivot bounces now remember earlierI mentioned to you about time zones so what I'm using in this particular one Iwant to show you some trades and I'm going to swap it over I'm using theexchange open high low and close now this particular pivot is a mid pivot itmeans it's in between two major pivots is that this is automatically calculatedand plotted on my screen using an add-on that I've purchased now TradeStation hasits own floor pivots in it it just doesn't plot the midpoints but we cansee here we've come down we've had an 89 bounce here we've gone up and this iswhere I refer quite often we're about to hit a pivot now normally speaking I workon my local time zone pivots which I'll show you in a moment so we've gone upwe've had a bounce we've hit the pivot we've then got had a shortingopportunity now notice here on our Platinum's falling awayso this basically I've got even add some great divergence but I've got somedivergence here pointing out that we're very very good chance that we're goingto fall away to the short side which is exactly what's happened so we fell awaywe had basically then really a t89 we've gone up here we've punched throughthe the key pivot you can see just there okay so this is 8:35 exchange time andyou can see here we've punched through the pivot and we've fallen away I'm notgoing to go through these other other trades we had here with some greattrades let's start by the way you can see here again we've punched through ofa pivot we've gone straight up we've had some beautiful divergence but we'rethrough the pivot we've come down and look what happens you can see herethe dotted line is my pivot we've come down and with down store that pivotagain this is also an 89 EMA bounce and for my students you know it's one of ourfavorite trade setups we also closed above the 34 and my zero lag is turn sothese are great trades to take it's also what are called wave one it's the firstmajor trade a major pullback we've had in this trend so let's just move along alittle here and we can see we go up where's my next pivot now let me justshow you this here I'm just going to pull this down so my next pivot was notup till here now what you'll see happened time and time again price willtrade it from one pivot to another and then bounce there maybe go through it sofor long-term profit targets you can have it from pivot to pivot now what youwant to do is because this one as an example turned around and fell away youmay have a trailing stop that is to troll you stop behind you if it doesn'tgo from one pivot so don't give all your profits back but one could argue onceyou got up above here you had your stop here it's then become and you lift yourstop up becomes what we call a free trade you've got no risk and when itdoes travel from one pivot to another it becomes very very profitable anyway Icover that in another video so we can see here we've rolled over wehad a lovely t10 up here traders actually we had a stop T10 and then wehad a we got all their money back and a whole lot more in this one but then wecome down and we had a pivot bounce and here we've come down we've got twovergence which is fantastic I've got t1 I've got my zero lag okay we ought ofwould have already been in on this pivot bounce now what a lot of traders will dothey will put in a buy limit order so they come down and they automaticallywhat we call stopping of a trade they're into the trade when it comes when I comedown here I'm not in till up here so yes I knowI'm giving away a few points here a few ticks by waiting but I prefer to do thatit's just my former trading and then down here we had a beautiful t10 tradeas well but the point here you can come down and you can see how we respectedthat pivot to the short side and then we bounced up we go back up again let mesee whether per pivot and you can see we didn't go right up and touch it and thenwe rolled over and what happened then then we come down and look at this herewe had three pivot bounces in a row Bain up to the 200 and up to 89 we had anice bounce trade here then we bounced again off a pivot again now traders andthis is for right particularly those that don't have my training course isthat we what we call regularly front run that is you'll find as we've seen here astrong resistance at these levels so if we're in a trade we'll take some profitoff at these levels because you go up in your bounce or fees and you can see thisis what's exactly what's happened a couple of times here so you've gone inyou've had a really nice trade here a bounce off t89 this is one of our highlyaccurate trades we've come down with bounced off for pivot again we've goneup bounce come down to follow-through then bang away we go then finally we hada bounce again now further along you can see here we then come down we test ithere and for my students that are watching this you can see here we thenhad a t2 but the mark the comment I brought up here as we were trading wasit was right on the pivot you want to be very cautious when you're trading upagainst the pivot and there's something I want to show you here on that which Ithink I wrote in further along where you get these strong pivots like you've gotand there's a extra black line there I'll explain in a moment so you can seehere we've got our 34 we've got our 89 yes sir 200 still in a downtrend butnotice how a channel notice how it's all basically horizontal and traveling italong a pivot this is where you've got to be very very cautious with thetrading is that this is where you can get chopped up really badlynow we're ahead we had a fantastic day today or last night with our trading sowith this when you're up like that you may give away one trade and so I gotstopped out of that what some are going to be doing I don't know let's just sitand wait for a new breakout so once again we've got everything goingsideways this is what I call chop City you have to be very very careful withthe trading now you can see here you hop it around this pivot before you wentaway again now what I want to show you is this because this really comes downto the time zone that you have an example ninja trader you can adjust thetime zones and this is where you need to go on and to really test them play withthe different time zones so let's have a look at this here so see down here on myparticular program a tradestation I've got here exchange or I can get localwith ninja trader you can adjust the time actually if I remember correctlyCentral Time you can put different time zones in so I've just put a black linehere just to show you let me just close this for a momentoops I've already clicked on that sorry traders let me just go along here alittle now I just wanted to show here that this is the exchange pivot now seeI've got put an extra black line here let me go back and change yes sorry ifI'm mocking you around here a little bit now let's go to my local time okay in mycountry and you'll see it projected down here at the bottom because what thisdoes it changes the pivots let's now go here and have a look at thisnow this danger zone notice how that black line that was this pivot so if Ireceive at times see that there so with the time zone it changes where yourpivots plot now I don't fully understand why this is and I can't take give youthe answer for this but I usually use my local time zone covets because I findthem successful as an example here if I remove that there we can see here thatusing our local time zones I still get lots of bounces lots of support lots ofresistance on my local time zone pivots as well so we're out a little bitcompared to what I had so long story here I want you to go and test yourpivots on different time zones plot them and just make sure that they plot okayetc and that you've got them right now let's go across and have a look at theEurodollar now this is the the chart we're looking at here right now this iscurrent as of the 16th of the 7 16th so we're in July 2015 now the yellow lineI've got here is a weekly pivot so you can see here we've punched through apivot here we've gone up and this is what I want to show you here rememberearlier I like to look for a pullback so we can see here and hopefully there'snot too much on the screen actually what I'm going to do I'm just going todisable my channel so see here we punch through a pivot we go through I wait forthe pullback then I enter be short and you can see we bounce off that pivotbeautifully now we can see here by my 200 the 89 and the 34 we've got adefinite downtrend here so a lot quite often you can put an order in here toeither buy or even the sell get you in a bit earlier but I like to wait becausequite often you'll see a puncher when you get these pullbacknow down here we can see you've come down you've hit resistance or support Ishould say on your weekly pivot then we go up but then the trend continuesso still follow the trend and so still I should say respect the trend so you'llquite often see this where you'll get a lot of pivot bounces now another thingto be careful of too is that in this particular case I've got history showingthat as you'll see here what I've got this is our today's pivotsI've got yesterday's pivots on there so on my particular program I can actuallyhave pivots going back for months back as much history as I load it's an optionI have it also can really draw on your CPUremember the more indicators you've got open and this varies from chartingpackage to charting package the more indicators you have open it can reallyin a fast smoothie market it can actually choke your system so just have open whatyou really need to have open out for illustration purposes I've got thepivots open here now see this here so I want to do illustrate look how we'vegone down we've been bouncing it around these pivots and if you're wonderingwhat on earth is happening here why isn't the market moving or wiserconsolidating you can see here it's on a weekly pivot and this is also a call achop zone because you can be badly injured on these that is that you'retrading losses can really mess up now from a technical point of view we had alovely little double bottom we've got fantastic divergence here and we've gota t10 now this is a five range which means if you're trading a standardcontract here each one of these candles is worth $50 so there's still some greattrades there but you can see it's giving some really strong support there we'vegone up we hit the the pivot we bounce around come down and there's some otherthings happening here we've also got the 200now let's go along here and we can see we've bounced around this pivot not agreat example but you can see we're hanging around the pivot areas what I'mnow going to do I'm going to pull up the ES let's have a look at the ES and thisis actually this is the bond 144 ES for today's action so let's have a look atthis now for our European friends this is of course very early in the morningfor you but for my North American friends if you're on the of course fromNew York to LA etc you've got home from work you want to do some trading afterwork well with some great opportunities trading the after market so what I'vegot here is the es 144 Tick now during the day during your main market hours thisis far too fast to trade for me it is anyway for most traders but after themarket closes you get home from work 2 or 3 afternoon in LA or New York laterin the day the 144 gives you some great trading opportunities now you can seehere that I've gone up and we've hit a pivot and you see that there you can seethe pivot there you see this bounce we've come down and we've hit anotherpivot so you can see as a tool for support resistance it's absolutelyinvaluable now so I'm just going to go back here I just want to check what's mytime zone here now I'm working on the local time zone ok let's have a look upso I just clicked on this again what I just want to do is show you somethingand and the reason I keep coming back to this this is really important that youtest this so what I'm now going to do is to go and change this back to exchangetime zone okay in this particular case we can seeup here if I remove that exchange it doesn't give me an upper pivot now twoagrees with my lower pivot I've got here and sorry oh so I'm just going to fixthis up so we've got this out of a way and so a lot okay so you can see thedifference in these pivot levels and this is how important that you get yourtiming right on your charting package with your floor pivots okay you can seethe effect now so locally getting back to my local time I'm much better havingand you can see and I find it's very accurate trading my local time i pivotswork really well with this particular program so let's now have a look atmaybe another market this one moment okay so what I pulled up here is justthe NQ the Nasdaq 89 tick and you can see hereas the market closed we come down we hit the pivot this is just to confirm hereI've got on here my local timezone and you can see the pivot was actually uphigher up above here but we've come down we get down a little bit when the marketreopened we've bounced we've gone up so traders I've covered a lot ofinformation in this and I hope I even confuse you too much because tradingpivots there is a little bit of a science to it remember if you're abovethe primary pivot the PP or the main-floor pivot quite a few get a longbiased if you're under it you've got a short biased in choppy marketsconsolidation markets or range-bound you'll bounce in between you'll seeyourself quite often bouncing from one pivot to another I like to as Imentioned in just closing this video I like to use other indicators to helpconfirm the trade I still believe very very much infollowing the overall and as an example here we can see by 89my 200 or or what or pointing to the long side so I'm going to really buythat but where I get angulation that is prices moved right away from my mas andof course if your student at mine you know what angulation is etc it andyou're hitting a pivot that really enhances or improves the chance of asuccessful trade.
