QUESTION

For me, I have seen that many times i have entered when a share has made a higher pivot low and then it moves up a bit and then makes a lower pivot low. Is this common or am I not entering right. This could also be because at this time I am not using any indicator and only using trend line and once we use 1-2 indicators along with trend lines entries are more confirmed.

REPLY BY SAINT
A higher pivot low doesn't mean we are going to see new highs. It could just turn around and continue its downtrend. Therefore, the importance of stops. And yes, as we put trendlines + support / resistance to moving averages, and patterns, and a few indicators and volume, then we get to drop a few of those that you might have taken now. But whatever you do, however much you learn, it's important to keep things as simple as possible.

QUESTION
Quick question on identifying a pivot. To identify a pivot high, should both the below statements be true or only the 1st one needs to be true 1. High should be higher than the highs of the bars on either side 2. Low should be higher than the lows of the bars on either side Same for Pivot low Also does the extent of diff between the high/lows of the pivot bar and the adjoining bars have any significance Also If pivot highs and lows are repeating quite often, does this mean that the script is not in a significant trend

REPLY BY SAINT
A pivot is not exactly a point, and therefore it need not be one single bar with lower high bars on either side to qualify it as a pivot high. It could be 2-3 bars .Basically, whether pivot high or pivot low, don't go in for an exact academic definition. Go with the eye. Taking the chart of Piramyd Retail, we have pivot lows on Jan27th, Feb28th, and Mar24th.Notice that each pivot low is lower than the previous one. We call that a downtrend. So too with the uptrend. Importantly, go with the eye. And what is not obvious to the eye is not worth it to put your money into.

QUESTION
In the above quote you say that a uptrend is caused by a series of higher pivot lows. Is it correct to say that in an uptrend we also have a series of higher pivot highs? The same in converse for a downtrend?

REPLY BY SAINT
Every uptrend would be characterised by higher pivot lows and higher pivot highs, and vice versa for the downtrends characterised by lower pivot highs and lows to know that is important in detecting the trend. BUT, in an uptrend, focus on the higher pivot lows and vice versa on lower pivot highs in the downtrend.....Why? More to do with where to place your stops and to know when this current trend is over. So, basically every pivot low goes on to make a higher pivot high and then a higher pivot low followed by a higher pivot high. As said before, this stock is in an uptrend. When do we say that this particular up move is over When a previous pivot low is taken out. Therefore, in an uptrend, train your eye to focus on the higher pivot lows.....So too in a downtrend, train your eye to focus on the lower pivot highs. A crack of a previous pivot low on a weekly chart indicates that this up move is over. Vice versa in a downtrend

QUESTION
Please have a look at the attached weekly chart of ITD Cementation. Clearly in the last three days there is a Pivot Low on 16th June. The daily charts show this is in a rally for the past four days. The downtrend is in question but we do not have a confirmation of the uptrend. How long do we wait till we make our move? As far as I understand from your previous posts, we only flag this stock onto our watch list. We wait till it makes a higher pivot low and higher pivot high. Lets say in the daily charts it makes a pivot low in the area above the current pivot low 522.70. Things are better and better. But the previous pivot high is in the range of 900. Do we have

to wait until this pivot high is taken out? What if the rally doesnt stop? Don't we loose out if we do not buy it early? Sorry for so many questions but hope you get my point.

REPLY BY SAINT
If you are an investor into ITD, another issue, but if you are trading it on a short to medium time frame, I'd skip this one looking at the low volumes. But let us take ITD as an example for learning purposes Yes we have a downtrend in ITD on the weekly charts. Why do we say that? We have taken out the previous pivot low on the weekly charts and we are definitely on the down in the intermediate time frames, and threatening to do the same on the longer time frames as well. As it stands now, we are in a downtrend once we get to that point when we clearly state that we are no more in an uptrend and quite obviously in a downtrend, we think of shorting every rally, and in this case as we cannot short, we merely step aside and wait Yes we got that pivot low on the week ending on 16th of June ,and then we got that rally. What do we do here? Nothing. Stand aside and wait for an uptrend. How do we know that the pivot low made on the above mentioned week is not the bottom after which we are moving up? Simple answer we don't. And when we don't know something, or there just is not enough data to tell us that the trend has changed, we do not put our funds into that trade, we just stand aside. So far, every rally is a selling opportunity we haven't come to that point when trends have changed and every dip is a buying opportunity. Now, at what point do we buy? Let us say that we are going to turn up from here and move upwards, do we buy. We have a higher pivot low on the daily, so why not? The answer to that one is: Depends on the time frame that you are trading. If you are in a trade for few days, then maybe. But there just is nothing like trading with the weekly charts supporting you as well. So do nothing wait for the weekly charts to give you that higher pivot low before committing funds. At present, this rally is only just that a rally in a downtrend. Now let us presume that we get that higher pivot low on the weekly charts, do we wait for the higher pivot highs to be taken out before entering Definitely not. Get to get ready mode once you get a higher pivot low(you could also buy here if we get a neat long basal pattern with a higher pivot low). If ITD forms a sideways base and a higher pivot low from here, you could buy here and add over 760 which is the previous lower pivot high.

QUESTION
I had a question related to his query. Will we take the 900 mark as a pivot high as what I have learned so far and read in dow theory and by martin Pring is that a pivot is made if a it retraces 33%, 50% or 66%. Now if we take other theories as well 12.5% is minimum retracement levels we take. In this case if take the high of 19th April, the move around 24th may was a mere sideway movement and not a retracement to qualify as a new pivot point. Please comment on the same and correct me if i have misunderstood the concept of a pivot.

REPLY BY SAINT
Attached below is a simple chart of ITD, and where to buy and sell. Keep things simple and trade what is obvious to the eye Pivots are just that-turning points. The amount of retracement however tells us about the strength or weakness of the preexisting trend, which we can get into shortly. Think the chart explains itself