I've never seen firm proof that (H+L+C)/3 is a magic price level, except for self-fulfilling prophecies. (Which do have value.) If that price does genuinely have some power, then we should probably keep it for pullback measures and entry ponts. But clearly using the DP/WP/MP for trend signals is problematic.grimweasel wrote:Interesting Gary - but the whole idea of the pivot is that it shows the central fulcrum around which price rotated the previous day. It's the middle of the previous day's action as far as I'm aware? Surely, by having one that updates all the time we risk losing the pivot's true signal and merely following an MA?
As I was thinking about this last night, and looking at the continuously-updated "pivot" calculations, I had the same thought -- "why not just use MAs?" It might be perfectly valid. Looking at the 9/20 EMAs now, they look a lot like the "continuous pivot" indicator I suggested last night. The EMAs signal trend changes at almost the same time as the "continuous pivot" calcs.
So it may be that using the traditional pivots is good for determining pullbacks &etc. But I suspect something like the 9/20 EMA might be better for trend signals. I'd say the major advantage of using the DP/WP/MP is that they're already on the chart.