High, low, and close are the most consistently influential pivots in a trading day. Throughout my day trading career, these three pivot points have provided me with opportunity after opportunity – and often, I can see that opportunity coming from 30 – 40 minutes away. They offer structure, they assist with analysis and they confirm the daily bias.
In the thinkorswim platform, I have an indicator designed to project the Daily HLC lines on the charts within the intraday timeline. This indicator also has “near” sensors, so that when price gets “near” one of these pivots, you get an alert on your smart watch.
With this indicator – you can also choose to show the open price of the market (another pivot point that price reacts to on the intraday charts) and that is the first selection choice on the dialog box.
– The next thing you see is the “show line color labels choice; this is a learning device I added to the study – so that you can develop a hand / eye connection with the colored lines you see and the name of the lines. You can turn that off (of course) after you assimilate the color of the lines with their position on the chart.
– The next choice is the aggregation period. We leave the setting here on daily – because we want to see the previous days levels. For the previous week levels and the previous month levels, we would just load them lines from their own indicator and not change this one.
– The next choice is “show only last period” and this is basically asking if we want to show these lines on today’s price chart, or would we like to see a history of these lines on previous days charts as well.
– The sound audible alert for Daily cross allows us to turn on / turn off all the alerts at once without having to go into the alert settings and turn them off individually.
– The show cloud is my own special design – this is how I developed a “near” alert on thinkorswim. The cloud is a “price band” around the HLC lines, and if price crosses into or out of these bands, the alert will sound. You can choose the size of the band in the user dialog box as well – as the picture shows below.
So, what do these lines actually look like? Below is a picture with them and the learning labels. Remember, you can turn these labels off, you can turn these alerts off, you can turn the cloud off and you can add the weekly and monthly HLC indicators to show previous weekly and monthly levels.
Previous day High Low Close study: http://tos.mx/MKWynP9
Previous week High Low Close study: http://tos.mx/Gwtcesy
Previous month High Low Close study: http://tos.mx/lEOdsTM
So – add these studies to your charts and take advantage of the assistance that they provide. Remember, if you do not have thinkorswim you can still use these pivot points by drawing the lines on your chart at what-ever broker you have.
If you want to learn more about how to use these institutional pivot points in your trading, click the coaching and consultation tab above and sign up for a 30-minute free consultation today. Price moves from pivot to pivot 90% of the time – are you leaning on these road signs?
