Day Trading Strategies – Invisible Support/Resistance
This article and video give you “Invisible” Support and Resistance levels for Day Trading Strategies that can really help your trading. I call them “invisible” because most people don’t see them – giving you the all important “EDGE” in trading because now YOU will see them!
Support and resistance levels provide price levels we look to potentially buy, short, or take profits. They must be used with other tools however, such as trend, cycles and momentum.
You can email me at [email protected] and I’ll be happy to show you how to get my Free Cycle Indicator to help you with your day trading strategies.
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Hey my friend. Doctor Barry Burns here with Top Dog Trading. Today we are going to talk about Day Trading Strategies, specifically the mid Pivots. Now mid pivots are something that not very many people use, and I love them. I find they work really really well. But there is a time to use them and a time not to. And I’m going to share all that with you here in just next few minutes.
So let’s talk about pivots first of all and how they are used in day trading strategies. When I’m talking about pivots right now in this context, I’m not talking about what I would refer to as swing highs and swing lows. Some people call these pivots just because it made a high and low, swing high and swing low. And that’s perfectly fine. And there is a context for that. But what I’m talking about today are what I call floor trader pivots which is a formula and its based off of the previous day’s high, low and close.
3 OF THE MOST IMPORTANT DAY TRADING PRICE LEVELS
When you’re using day trading strategies specially. Three of the most important levels you should always be aware of is the previous day’s high, that’s right here, yesterday’s high. Yesterday’s close, and you can see that over here. And then Yesterday’s low. And the reason you need to be have watching these and have these on your charts is because, well pretty much everybody else does. So they have a self-fulfilling prophecy to them in the sense that people are looking at those levels as being major levels of value. So that’s all fine.
Now the floor trader pivots, its basically a formula that’s based off of those 3 values. So it forms a, let me take this off first, so we can focus on the pivots. It creates a pivot point that’s your central pivot, that’s considered the neutral zone, the kind of the line on the sand between the bull and bear market.
Then you have resistance levels and they are called R1, R2, R3 and they be above the pivot point, or sometimes called central pivot. And then below that you have your support levels and so those are S1, S2, S3. And so those are below your pivot point or your central pivot. Those are in your bearish area.
Okay. Now, what I do is, and that’s very common. A lot of people do this. Very very common. And again as part of the reason it works is because so many people use them. So for example, when we look at S1, you know the market bounced off a bit here. R1, the market bounced off of it there, went back into the previous day’s high, came up to it there. So yes provides support resistance. It’s not enough to trade with, but it’s part of a trading methodology.
HERE ARE THE “INVISIBLE” DAY TRADING LEVELS
Now the other thing that I do though, that’s rather unique and I’m certainly not the only one who does this, but not many people do it. So here we have your pivot point and here we have your R1. What I do is, I put mid pivots in there. So as you can see, I have it labelled R1-PP (Pivot Points) so that’s the 50% level, very simple to calculate. Just 50% between the pivot point and R1. And that’s it. Its not brain surgery.
And then same thing going down. So between the pivot point and S1, 50% level there and get my mid pivot. Now very simple and lot of the best things in trading are simple. But I just draw extra support resistance levels. And as you can see the market indeed. After it came off of R1. It came back up and where did it find resistance, at that mid pivot. Boom. Right there. There was no regular pivot point there, just the mid pivot. Same thing down here. We came down, went down to S1, then where did we come back up to? Well, we went to yesterday’s low, and then we kind of hovered around that. But then we went back up, and where did we go? We went to the mid pivot. So, and by the way as it came down from there, same thing, where did we end up? Down to the another mid pivot. This one’s between S1 and S2. And we found support there. So they are good levels to have. And again the market really does respond to them.
WHEN TO USE THEM AND WHEN NOT TO USE THEM
Now to finish up, I told you that I would tell you when to use them, and when not to use them. So because pivot points are calculated on the previous day’s high, low and close. If the previous day was a narrow range day, then don’t use the mid pivots. I don’t use the mid pivots.
Why? Because then your regular pivot lines will be very close together. And you’ll just have two new lines that are all close together, and it just looks messy. And there is really not much room for the market to move. It’s normally going to move between its regular pivot levels and not the mid pivots. So the mid pivots work best when the previous day was a wide range day. And you have a lot of space between the regular pivots.
Between pivot point, R1, R2. As you can see, it even goes off of the chart here. So we’d have to go all the way up here for R2, all the way up there for R3. See how far those are apart. So to put mid pivot there, gives us some support resistance levels in that wide space.
So that’s it for today. And I invite you to add those to your charts. Test it out. See it for yourself. And see if it makes sense to you. And I think you are going to find that they provide great support resistance levels that you haven’t seen before, Invisible Support Resistance. That you’ll see and people on the other side of your trade, they won’t see it. Gives you an edge. It gives you an advantage.
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