Pivot Trading- a new way of Trading

Subhadip

Well-Known Member
First of all thanks for starting this thread for us to learn.
Amazing patience you have Sir !!!:clapping::clapping::clapping:

Can you please post some chart examples for ERL?
Yes sir. I will post tonight with detail explanation
 

jagankris

Well-Known Member
Thanks a lot, but can u remember who has send you the same?

Hope u can remember your old friend my dear friend.
Honestly my friend I didn't understand what you mean.May be I forgot something.

But definitely you deserve a special thanks for writing in fish thread and starting the thread afresh which got deleted due to spam attack.:mad:

And I owe/deserve special thanks many good friends of forums for selflessly sharing/helping .:thumb: and from whom I learn t/learning/and learning more.

Smart Trade,AW10,Dan,Anurag Munjal,Raunak Agarwal,Oilman,Tnsn,VJAY,Colombus,HealthRaj,XRAY,Amit Randive,Veluri,Subhadip,HEM,MechTrader,Jahan,Manojborle and many others.

And VJAY is my good friend from 2010 when I joined the forum and subsequently when we met personally in Pune - a traders meet organized by Raunak Agarwal.

After that twice he has come to my house.
Or at least he used to call me or share what ever he is trading/Traded - since then Ambush,RaghavaCC ,Flow 30 or IDF 15 which he modified to suit him.Or how words of Smart Trade ji helped him to accept losses/and follow the system with discipline and what change RaghavaCC's words brought changes in him etc.

Always used to say to me Flow in any discussion regarding trading.
So when ever the word flow comes - only VJAY comes to my mind.:)

Last time when we met - that was the time he started the Fish thread.
And he said a few things bag ground - and I must really appreciate the magnanimity of VJAY and Smart Trade ji.

I wish VJAY soon returns to the forum :thumb:

And but my thoughts were influenced by AW10 and I never followed/paid attention to understand flow ? :(
He was then speaking from a very advanced level and I was a beginner then (after indicators/systems chasing) so failed to understand the depth of his words or others.

But I never forget his words and his words laid me the fundamental/guiding principles.
And now slowly co-relating/understanding what all the masters said/ saying.
And also learning new daily afresh.

And I can vouch to LearnTheMarkets/or any one - that it is sheer delight of sharing and helping to cut short the learning curve are the intentions of Gurus/Masters and starting this thread and nothing else :thumb:

Keep up the good work my friend and help me(us) to cut short the never ending learning curve :thumb:

May be it is the time for me to knock the Jade palace and speak to Jade Masters again :D
 

Subhadip

Well-Known Member
Early Reversal Line (ERL):

In the simplest terms ERL is nothing but a Pivot High (in an Uptrend) / Pivot Low (in a Downtrend) that has been broken and the price has closed at a visual distance from the body of that Pivot High / Low. The bodies of these Pivots (PH in an uptrend and PL in a Downtrend) form the ERL. In an Uptrend, the Body High (Open) of the Bearish Bar associated with the PH will form the ERL, and in a Downtrend the Body Low (Open) of the Bullish Bar forming the PL will form the ERL. The wicks / tails are ignored.

So two basic requirements for ERL:
1. We need clear visible bodied pivot, and
2. A visual distance close away from it.



No mathematical formula for measuring visual distance is there… sometimes 20 points is enough and sometimes 30 seem less.. we just need to go with our eyes… just ensure that the Pivot have been broken convincingly. Visual distance is how far the price has moved from the line and how strong a bar has closed with respect to the line. For an ERL to be operational, this is an aspect that needs to be considered.

Hence, in case of a pre-existing uptrend, once price breaks the Pivot High the ERL exists...and once we get a close above that ERL line at a visual distance then that ERL is activated / operational. (Similarly, in case of a pre-existing downtrend, once price breaks the Pivot Low the ERL exists.. and once we get close below that ERL line at a visual distance then that ERL is operational.)

Visual trend forms visual ERL .. minor forms minor ERL .. major trends form major ERL..Based on our method we trade the relevant ERL..
 

Subhadip

Well-Known Member
How to use ERL in Trading:

1. Rejections
Let’s say that we are in a pre-existing Uptrend and we have a clear cut breakout above our Pivot High, we have our ERL. We know that once this breakout closes at a visual distance from the ERL our ERL will be activated / operational.
Now, if the price collapses and the Bar closes below our ERL, we call it a Rejection.
Hence, Rejection is nothing but when a Bar closes below ERL (in case of uptrend) or above ERL (in case of downtrend). And we reverse our position above or below the Rejection Bar High (Low) +- F as the trend may be.This becomes more Potent if the Rejection forms a Pivot above the ERL.(If Trade is not Hit with filter above / below the rejection bar that bar will become the pivot).

2. Failure
Failure is nothing but the bar that breaks the pivot and goes away at a good visual distance but eventually the same bar falls back and closes below the non-operational ERL line (body of pivot).


When we don’t look at the ERL?

1. The Pivot has to be from the same Trend for ERL
Assume we are in a downtrend, our SAR is at the latest Pivot High. Now, if the latest PH is broken we reverse our position to Long. That PH cannot be considered now for ERL in case of our new uptrend as it is from a Previous Trend. ERLs are early reversal signals and should be based on the price action in the current trend, not the previous one. Hence, in the new uptrend, wait for the price to form a new higher PL and then let it take out the previous Visual Pivot High at a visual distance for it to be considered as an ERL.



2. Ignore the ERL in Sideways Market



There may be many ERLs formed within the Sideways but we ignore them altogether. The ERL play will resume once the Sideways is taken out and Up / Down trend resumes.

The Visual Distance is just a bar closing over a potential ERL that is obvious Visually.............There is no percentage or mathematical calculation to it........Visually,a breakout bar over a potential ERL and a visual close outside of this potential line activates it.


The concept of ERL::


 

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