ProfitingProfiting withwith
Pivot BasedPivot-Based C tConcepts
withwith Frank OchoaFrank OchoaPivotBoss.comPivotBoss.com
A Powerful ApproachA Powerful ApproachA Powerful Approach…A Powerful Approach…
Trending Here
Buy HereSideways
Here
AgendaAgendaAgendaAgenda
Profiting with Pivot-Based Conceptsg p•Pivot Trend Analysis–Buy Support Sell Resistance–Buy Support, Sell Resistance
•Pivot Width AnalysisF ti P i B h i–Forecasting Price Behavior
•Introduction to Pivot Relationships–Higher Value Relationship–Lower Value Relationship
3
–Inside Value Relationship
Pivot-BasedPivot Based ConceptsConcepts
Pivot Trend AnalysisPivot Trend AnalysisPivot Width AnalysisPivot Width AnalysisPivot Width AnalysisPivot Width AnalysisPivot RelationshipsPivot Relationships
Why are Pivots Useful?Why are Pivots Useful?Why are Pivots Useful?Why are Pivots Useful?
• Price-based Market-• Price-based, Market-Generated information
• Help identify valueHelp identify value, overbought, and oversold conditions
• Leading indicators; zero lag• Lead to a self-fulfilling g
prophecy• Can be used for a wide
array of analysis
Market Profile Market Profile LevelsLevels Floor PivotsFloor Pivots Camarilla Camarilla
PivotsPivotsLevelsLevels PivotsPivots
R2 H5
R1 H4
PP
TC H3
POC
VAH
PP
BC L3VAL
POC
S1 L4
S2 L5
Pivot TrendPivot Trend AnalysisAnalysis
Buy Support in an Uptrend,Sell Resistance in a Downtrend
Pivot Trend AnalysisPivot Trend AnalysisPivot Trend AnalysisPivot Trend Analysis
• Buy at support in a bull y pptrend
• Sell at resistance in a bear trend
• Keeps you disciplined to the trend
• Certain pivots become “retired” during a trend
• Focus on higher b bilit lprobability reversals
Buy Support in a Bull TrendBuy Support in a Bull TrendBuy Support in a Bull TrendBuy Support in a Bull Trend
Buyers entered at the pivot range
Buy Support in a Bull TrendBuy Support in a Bull TrendBuy Support in a Bull TrendBuy Support in a Bull Trend
Certain Pivots Become “Retired” During Strong
T d
Buy Dipsat Support in Bullish Trend
Trends
Sell Resistance in a Bear TrendSell Resistance in a Bear TrendSell Resistance in a Bear TrendSell Resistance in a Bear Trend
Sell Here
Sell Resistance in a Bear TrendSell Resistance in a Bear TrendSell Resistance in a Bear TrendSell Resistance in a Bear Trend
Close Above
Sell Here
Close Above Range Breaks Downtrend
Sell Resistance in a DowntrendSell Resistance in a DowntrendSell Resistance in a DowntrendSell Resistance in a Downtrend
Sell Rips
Buy into Morning WeaknessBuy into Morning WeaknessBuy into Morning WeaknessBuy into Morning Weakness
Buys Dips at Pivots,Goal is a New HighGoal is a New High
Pivot WidthPivot Width AnalysisAnalysis
Trading RangeBehavior
TrendingBehavior
Narrow
Wide
Forecasting with Pivot WidthForecasting with Pivot WidthForecasting with Pivot WidthForecasting with Pivot Width• The price behavior of a prior
i d f i h l fperiod of time can help forecast the price behavior of an upcoming period of time
• An Unusually wide pivot range can forecast sideways trading
• An Unusually narrow pivot rangeAn Unusually narrow pivot range can forecast trending and breakout marketsAllows you to anticipate potential• Allows you to anticipate potential market behavior
• Allows you to choose which markets to trade
Research In MotionResearch In MotionResearch In MotionResearch In Motion
Game Plans for Narrow/Wide DaysGame Plans for Narrow/Wide DaysGame Plans for Narrow/Wide DaysGame Plans for Narrow/Wide Days
Sideways Markets• Play Reversals• Tight Stopsg p• Close Targets• or Stand Aside
Trending MarketsTrending Markets• Play Breakouts• Loosen Stops• Bigger Targets• Look to be “In”
Apple IncApple IncApple, Inc.Apple, Inc.
Revolving Nature of Pivot WidthRevolving Nature of Pivot WidthRevolving Nature of Pivot WidthRevolving Nature of Pivot Width
Mini Sized DowMini Sized DowMini Sized DowMini Sized Dow
Open BeyondRange/Value Indicates
Major Movement Ahead
Narrow Ranges = Big PotentialNarrow Ranges = Big PotentialNarrow Ranges = Big PotentialNarrow Ranges = Big Potential
Open Beyondp yRange/Value IndicatesMajor Movement Ahead
22
7 Pivot Range7 Pivot Range RelationshipsRelationships
Higher ValueHigher Value Lower ValueLower ValueHigher ValueHigher Value Lower ValueLower Value
Overlapping Lower ValueOverlapping Lower ValueOverlapping Higher ValueOverlapping Higher Value
Inside ValueInside Value
Unchanged ValueUnchanged Value Outside ValueOutside Value
Inside ValueInside Value
Why are Pivot Relationships Useful?Why are Pivot Relationships Useful?Why are Pivot Relationships Useful?Why are Pivot Relationships Useful?
• Allow you to gauge market strength/weakness
• Allow you to anticipate potential• Allow you to anticipate potential price behavior
• Allow you to focus on the best ytrading candidates
• Keep you disciplined• Force you to do your homework• Allow you to plan your trades
The Higher Value RelationshipThe Higher Value RelationshipThe Higher Value RelationshipThe Higher Value RelationshipHigher ValueHigher Value
Higher Value• Most bullish relationship• Occurs when the pivot• Occurs when the pivot
range is completely higher than the prior session’s pivot range
• Look to buy at support in a bullish trendbullish trend
• Buy into weakness, sell at a new high within the trend
Higher Value RelationshipHigher Value RelationshipHigher Value RelationshipHigher Value Relationship
Higher ValueRelationship
Buy at SupportBuy at SupportBuy at SupportBuy at Support
Higher ValueRelationship
Higher Value: Buy at SupportHigher Value: Buy at SupportHigher Value: Buy at SupportHigher Value: Buy at Support
Failed Higher ValueFailed Higher ValueFailed Higher ValueFailed Higher Value
The Lower Value RelationshipThe Lower Value RelationshipThe Lower Value RelationshipThe Lower Value RelationshipLower ValueLower Value
Lower Value• Most bearish relationship
Occ rs hen the range is• Occurs when the range is completely lower than the prior range
• Look to sell at resistance in a downtrendSell into strength with a• Sell into strength, with a target of reaching a new low within bear trend
Lower Value RelationshipLower Value RelationshipLower Value RelationshipLower Value Relationship
Lower ValueLower ValueRelationship
Lower Value RelationshipLower Value RelationshipLower Value RelationshipLower Value Relationship
Lower ValueRelationship
Sell at ResistanceSell at ResistanceSell at ResistanceSell at Resistance
Lower ValueRelationshipp
The Inside ValueThe Inside Value RelationshipRelationship
Use the Pivots to trade breakaway days
Identify the most explosive breakout days
Inside Value RelationshipInside Value RelationshipInside Value RelationshipInside Value RelationshipInside ValueInside ValueInside Value
M l i l i hi• Most explosive relationship• Occurs when current range is
completely inside prior rangecompletely inside prior range• Look to trade a breakout from
price range• Initiative participants step in
and aggressively push price to new valuenew value
• Loosen stops, trade for bigger profits
• Trend morning, or trend day scenario may occur
Mini Sized DowMini Sized DowMini Sized DowMini Sized Dow
Open BeyondRange/Value Indicates
Major Movement Ahead
The Inside Value SetupThe Inside Value SetupThe Inside Value SetupThe Inside Value Setup
Inside ValueRelationship
Identifying an Inside Value SetupIdentifying an Inside Value SetupIdentifying an Inside Value SetupIdentifying an Inside Value Setup
Result of the SetupResult of the SetupResult of the SetupResult of the Setup
Price opens beyond range and value,
i di ti bindicating buyers are aggressively seeking
new value
Inside Value BreakoutInside Value BreakoutInside Value BreakoutInside Value Breakout
No gap, so must wait for breakout from price range
Inside Value BreakoutInside Value BreakoutInside Value BreakoutInside Value Breakout
Trading with DisciplineTrading with DisciplineTrading with DisciplineTrading with Discipline
• Use the pivots to develop a• Use the pivots to develop a theory for market direction and behavior
• Identify the best entry and exits points before the market opensmarket opens
• Let the market prove or disprove your theory
• Do your homework• Trade with confidence and
e ec te o plan
42
execute your plan
Secrets of a Pivot BossSecrets of a Pivot BossSecrets of a Pivot BossSecrets of a Pivot Boss
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ProfitingProfiting withwith
Pivot BasedPivot-Based C tConcepts
withwith Frank OchoaFrank OchoaPivotBoss.comPivotBoss.com
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