Pivot points

Pivot points

Astute trader will always have close the previous day in his head. He also knows the high and low (price he would like to buy and sell, but probably not) the previous day. He also knows the opening price, which tells if buyers or sellers are in control for the day.
The previous day's high and low, and today is open have very strong psychological implications and the most important "pivot points" to recognize. Concentrating on the price action near these places, you can eliminate much of the hard work tape reading. Many times the market will let us know immediately if this will be the subject of support or resistance.
The previous day's high and low tendency to overlap in areas of congestion. Look to exit profitable trades immediately on these points in sideways markets. In trending markets, the price will pass through these points, a little before I give up. When the market is strongly trending, the opening price becomes important.
If we are looking high, low, or opening price as a pivot point, we are watching to see if there is any impulsive price action as the market is approaching a point or move away from it. What is "impulsive action?" I like to call "whoosh." The market moves fast, as if just coming to life, for the first time. It is usually a series of ticks in one direction without a tick in the opposite direction. The market is tipping his hand. A sequence as tends to consolidate or to pause a little before being followed by a more impulsive action. This is quite easy to see in the market as the S & P is if you look at the short time frame. If you measure the "whooshes", which we can do in several ways, we see that the market tends to have a continuously moving at least 2 / 3 is on track. Not bad for the arrival of "positive expectations", simply by following price action.
In conclusion, tape reading is not seen any trade that passes (monotonous task), but keeping an eye out for unusual impulsive action, an unusual space, or just observing the way the price trades at significant levels. Each price swing of value prediction on what the next immediate move should be. We then follow the price action to see if that move plays out.
Tape reading is at the heart of swing trading. When looking for short-term moves, price-based indicators derived will be too late to be of value. Ultimately, retailers should feel a great sense of freedom, when they can rely on simple graphs to formulate a game plan or a conceptual map in their heads - and the movement of the bar to tell their game plan is correct.