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

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ProfitingProfiting withwith

Pivot BasedPivot-Based C tConcepts

withwith Frank OchoaFrank OchoaPivotBoss.comPivotBoss.com