Floor Traders’ Daily Pivots

 

For anyone not familiar with these levels let me just say that they can have a profound effect on the INTRADAY PRICE support and resistance. I recommend that you display them on your 5 minute ES chart each day.

It’s not that these daily levels have any particular geometric significance, it is just that FLOOR TRADERS are following the levels each day and they can have a self fulfilling effect on short term price reversals some days.

The FTP’s are calculated from the prior days high-low-close and the main levels are R2, R1, P-FLT, S1, S2. Where P-FLT is the new days balance point, R1 and R2 are higher levels for resistance and S1 and S2 are lower levels for support.

Primarily these levels are a guide to intraday trend. i.e., if the market is rising and breaking up through P-FLT, R1 and R2 it is in a strong movement. Conversely if it is breaking down through S1 and S2 it is in a weak position.

Some days the R1, R2 or S1, S2 will fall on dynamic geometric levels as the market unfolds, when this happens they become extremely useful in attracting extra buying or selling pressure should the market want to reverse or break through them.