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Wednesday , September , 26 2018
Pivot Points

What are Pivot Points and why are they useful?

In the financial markets, a pivot point is a price level that is used by traders as a possible indicator of  the markets future movement in time and space. Pivot points are resistance or support levels that are created technically by watching money flow analytics of the major movers and shakers which are the institutional investors and traders which will help us pinpoint potential reversals in price.

MSP ALGO is tracking two types of pivot points.

1) Money Flow Pivots - Money flow pivots are static and generated using MSP ALGO Money flow analytics to warn traders that a stock price is getting near a pivotal area and may reverse. Money flow is analyzed each day and a new pivot report will be created before the market day, if a new pivot point is triggered for a stock. If price is above the pivot point it is bullish, if price is below the pivot point then it is bearish.

2) Dynamic Reversal Pivot Points - Based on watching money flow in real-time and algo generated block trades near these critical zones we can tell if advance institutional buy or sell orders will be placed in the near future. Price has a higher probability to reverse near these pivotal areas. This algorithm is predicting future advance order flow based on money flow and money flow pivots. It's goal is to let the trader know where institutional orders are going to occur at what price before they actually happen and while they are being executed in real-time. If price is above the pivot point it is bullish, if price is below the pivot point then it is bearish.

Money flow pivots come out once a day before market open; if applicable for a stock and reversal pivot points reports are generated every 10 min.

The Pivots points alerts reporting tool contains the following information displayed above.

1) Symbol

2) Price of stock when pivot was triggered

3) Money Flow sentinement at the time the pivot was triggered.

4) Chart Signal is the Short / long signal at the time the pivot was triggered. 

5) Ratio in or Ratio Out

6) Divergence

7) Buy Price - The purchase price at the time the pivot was triggered

8) Sell Price - The sell price at the time the pivot was triggered

9) Money Flow Pivot - Price of the pivot generated by MSP ALGO

10) Pivot Type - The type of pivot or pivot name if any

11) Date Triggered - The date and time the pivot was created

12) Reversal Pivot - Distinguishes if a reversal pivot or not

13) Date Triggered - The date and time the reversal Pivots was triggered


The best time to look at the "Reversal Pivots" is before taking a trade near a reversal zone. It can pinpoint reversal or continuation of a move in real-time. Sometimes we may watch a chart and see price going up, but we do not see the big money backing that move. We may see them selling while retail is buying and vice versa. Reversal Pivots let you know if the Big Boys are backing the move with money or not. When considering a trade near a major critical support or resistance zone, it is always the best practice to see what the reversal pivots money flow is doing to ensure backing by the institutional traders for your long or short position.

 

Example of Money flow and reversal pivot points (see chart below):

1) New Money Flow Pivot Point near $172
2) New Reversal Pivot Point near $172 - So we know the institutional traders are nearby, if they  are buying price is going to breakout, if they are selling price will pull back. We can see they are buying by looking at the generated report and price held above the $172 pivots.