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Ultimate Pivot Points

The Ultimate Pivot Points™ Indicator Package is the most advanced and extensive “Pivot Points” indicator to date.  Most traders are only familiar with the default “Floor Trader’s Pivots” found in most trading platforms.  However, there are several other effective “Pivot Point” methods used for calculating support and resistance levels.  The Ultimate Pivot Points™ Indicators include each and every one of these unique “Pivot Point” methods, making it one of the most complete support & resistance (S/R) indicators available to traders.  

The Ultimate Pivot Points™ Indicator was initially created as an improvement upon the extremely popular and effective “Floor Trader’s Pivots”, which uses the previous day’s high, low and close to determine what the key intra-day support and resistance levels are for any given symbol.  Our goal was to develop a complete and all-encompassing solution for pivot point trading and have therefore added the following pivot point methods and advanced features:

 

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Ultimate Pivot Points Trader Guide  

The indicators included within the Ultimate Pivot Points Indicator Package are:

 

Ultimate Pivot Points Indicators

 


 

The UPP™ Indicator Package now includes all of the following Pivot Point methodologies:

 

                                 Yellow-Bullet   Floor Trader's Pivot Points (Advanced Version)

                                                      
Yellow-Bullet   Woodie's Pivot Points

                                                      
Yellow-Bullet   Camarilla Pivot Points

                                        
Yellow-Bullet   Demark Pivot Points

                                        
Yellow-Bullet   Fibonacci Pivot Points

 

We have taken the original version which only calculates R1, R2, R3 and S1, S2, S3 and have added the following features:


Green-Check Additional Support/Resistance Levels of S4 and R4

Green-Check Option to Display Half-Pivots (S/R 0.5, S/R 1.5, S/R 2.5, S/R 3.5)

Green-Check Option to Display Yesterday’s:  Open, High, Low, Close (OHLC)

Green-Check Option to Display Current Day’s:  Open, High, Low, Close (OHLC)

Green-Check Text Labels are Plotted Adjacent to Each Level for Quick Identification

Green-Check Visual and Audio Alerts for when Price Crosses any of the S/R Levels

Green-Check Complete Customization Process Allows Users to Personalize UPP™

 


A value that is known as the daily “Pivot Point” (PP) is obtained by averaging the previous days high, low and close. By applying a set of formulas to the Pivot Point, additional levels of both support and resistance are calculated. These levels are commonly known amongst traders as R1, R2, R3 and S1, S2, S3.

The “Pivot Point” (PP) level is recognized as the intra-day point of equilibrium between the bulls and bears, and is usually where the largest amount of trading volume takes place.  The reason is because the floor-traders and market-makers for each specific market are using the PP as the “baseline” level of the day and order and balance is usually maintained by keeping price between the Pivot Point (PP) and the first levels of support (S1) and resistance (R1).  Unless new traders/investors come into the specific market, the floor-traders and market-makers usually just play amongst themselves and price is contained within the levels of R1 and S1.

When new traders/investors do come into the specific market, price will often exceed the first levels of support (S1) and resistance (R1) and will move on to test the second and third levels (S2, S3 & R2, R3).

When the market exceeds each level of support and resistance, it often has profound implications for the rest of the trading day.  The reason is that the floor-traders and market-makers temporarily adjust their intra-day valuations of the stock, which has a pronounced effect on when and where both rallies and pullbacks will end. 


Take the following scenario for example:


GOOG has fluctuated between the PP and R1 for most of the trading day and then suddenly news is released that sends shares soaring up past the resistance levels of R1 and R2.  Price now sits between the R2 and R3 levels …

With only a few hours remaining in the trading session, the floor-traders and market-makers have now shifted their focus on the levels of R2 (as support) and R3 (as the next upside target). 

If price should continue to rally, then the R3 level is going to see profit-taking by many of the “big players”.

If price should reverse and a pullback ensues, then the R2 level is likely to provide support since the “big players” will step in and start buying again.    

The main reason why the Floor Trader’s Pivots work so well is because so many traders are watching the various levels and executing their orders together when price approaches each specific level.  This fact has led many traders to come to the realization that …

”If all of the floor-traders and market-makers are honing in on the same levels, then I should just join their game and focus on the same levels as the “big players” so that I can trade in ‘good company’.”

The result is that an overwhelming amount of traders are trading ‘together’ in a sense, which simplifies their entire trading process and gives them a small edge over those who are unaware of the various Pivot Points.  In theory, it becomes a game with two sides; “The Herd” vs. Individual Traders. Trust us, you do not want to go against the herd when price approaches one of these key levels of support or resistance.

 


 

Floor Trader's Pivot Points Title 

Floor Trader's Pivot Points

Floor Trader’s Pivot Points have been around for several decades and are considered to be the classic or traditional way of calculating support and resistance levels.  This method calculates the main pivot point (PP) level by averaging the previous period’s High, Low, and Close.  The support and resistance levels are then calculated using the main pivot point (PP) level and the previous period’s high and low.  Floor Trader’s Pivot Points are still the most popular amongst traders and as a result, its support and resistance levels may have more predictive value than any other pivot point method.

  


 

Woodie's Pivot Points Title

Woodie's Pivot Points

Woodie’s Pivot Points differs from the other methods by using the current session’s opening price to calculate the main pivot point (PP) level.  The formula ignores the closing price of the previous period and instead applies more weight to the opening price of the current period.  This gives the most recent price more emphasis when calculating the main pivot point (PP) level.  The support and resistance levels are calculated the same as the Floor Trader’s Method, however the levels differ since they are based on the main pivot point (PP) level.

 


 

Camarilla Pivot Points Title

Camarilla Pivot Points

Camarilla Pivot Points were developed in 1989 by a successful bond trader known as Nick Stott.  While the pivot point (PP) level is calculated using the same formula as the Floor Trader’s Pivots, the support and resistance levels are calculated differently;  using the closing price and the trading range of the previous period.  

Unlike other pivot point methods, the Camarilla Method puts more emphasis on the 3rd and 4th levels of support and resistance (S3, S4, R3, R4).  Typically, traders will look for price to stay within the S3 - R3 range throughout the duration of the session, while expecting price reversals to frequently occur at the S3 and R3 levels.  The S4 and R4 levels are intended to provide strong support and resistance, however if price moves beyond these levels it is often indicative of a strong breakout and price may move significantly higher or lower. 

  


 

Demark Pivot Points Title

Demark Pivot Points

Demark Pivot Points are unique in that there is only one level of support/resistance, known as S1 and R1.  The main pivot point (PP) is not an official Demark value; however we have included it as a point of reference.

When using Demark Pivot Points, the calculations for the S1 and R1 levels differ quite a bit from day to day, depending on whether the previous period’s close was higher, lower, or equal to the previous period’s open. 

If Close > Open = High given more weight
If Close < Open = Low given more weight
If Close = Open = Close given more weight

  


 

Fibonacci Pivot Points Title

Fibonacci Pivot Points

Fibonacci Pivot Points use the same formula as the Floor Trader’s Pivots to obtain the Pivot Point (PP) level, however the various support and resistance levels are calculated by using Fibonacci retracement and extension levels of the previous session’s trading range.

It should come as no surprise, but we at Fibozachi prefer to trade using the support and resistance levels of the Fibonacci Pivot Points.  Since these levels are based on Fibonacci retracements and extensions of the previous day’s range, we believe that they have more predictive value than most of the other methods.

 


 

UPP Zones

 

Ultimate Pivot Points™ provides additional levels of S/R by calculating and plotting R0.5, R1.5, R2.5, R3.5, R4 and S0.5, S1.5, S2.5, S3.5, S4! Not only that, but it also gives the user the option of plotting both yesterday and today’s OHLC (open, high, low, close)!


By adding the “half pivots” in addition to the opening and closing prices and the highest highs and lowest lows, we have effectively increased the number of S/R levels from 7 to over 20! 

The reason this is so effective is because each day will have special “UPP
Zones” where multiple bands of support or resistance cluster together at a certain key level.  These “UPP Zones” often prove to be the strongest and most important levels of support and resistance during each trading session.

 


 

Super DMI Automated Scanning Capabilities

Ultimate Pivot Points™ also includes a specialized version of the Indicator that is compatible with TradeStation’s RadarScreen and NinjaTrader’s Market Analyzer.  It provides a fully detailed overview of all the support and resistance levels for any list of symbols; enabling traders to properly manage their current positions, scan for symbols that are crossing above or below any of the various support & resistance levels, or just scan for symbols that are extremely oversold or overbought! 


There are several ways in which you can employ the UPP™ Scanner into your own trading routine.  Consider the following methods that explain how to best utilize the UPP™ Scanner;

 

Scan for Extremely Overbought & Oversold Symbols

Identify Symbols Crossing Above or Below Any of the Support & Resistance Levels

 

Super DMI TradeStation RadarScreen

 

UPP RadarScreen

(Click to View Image)

 


 


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