Thursday, March 15, 2007

Another Pivot Point Method

One of the best methods of determining entry and exit points on a trade are pivot points. Here is another way that I use pivot points to inform me of the probability of a trade's likelihood to succeed.

This is a pivot point cross method -

This is an easy enough program to write in Excel (which is one of my primary tools - because I'm not frugal - I'm cheap).

What you do is simply find a sequence of pivot points, take a 4 period average of the pivot point and a 4 period average of the closing prices (simple moving average is best in this regard) and plot them together. When the average cost crosses the average pivot you buy you have the makings of a buy-able stock.

Because I generally only need a few months of data I usually get the data set for this from the NASDAQ site. Go to their charts page for any stock and right click on the page and you will get one-year's worth of open-close data in a separate window - copy that and paste it into your Excel spread. It takes but a minute and you will have a handy set of raw data to work with.

I trust you can find the formula you need - you only need the pivot point itself and that is simply (high+low+close)/3 so that is simple enough.

Coincidentally (not) this is GLD and GLD will feature prominently in my next post. Note from the chart - GLD isn't signaling a buy just yet.

4 comments:

JOSEPH said...

Is there a way of using EXCEL in an Automatic Trading System?

Marlyn Trades said...

You can buy an interface with Prophet.net that will provide a data stream (end of day) to your excel spreadsheet - I don't know of any API that goes the other way - but I've been away from the software review business for a long time and things change rapidly. Google "excel interface" or "excel dll" or "excel API" and see what comes up. Let me know if you find anything interesting.

MachineGhost said...

//Marlyn Pivots AmiBroker Code
Pivot=(H+L+C)/3;
PivotMA=MA(Pivot,4);
CloseMA=MA(C,4);
Plot(PivotMA,"Signal",colorYellow);
Plot(CloseMA,"Marlyn Pivots",colorTurquoise);

QUALITY STOCKS UNDER 5 DOLLARS said...

Great movement