Here are the orderflow charts from last week.
These are for all the indices we track in the trading room including the MCX and NSE exchanges.
Bank Nifty :
Copper :
Crude :
Gold :
Nifty :
Silver :
The system generates buy and sell triggers which are used to initiate as well as reverse an existing position.
We recommend part booking of profits on our in house Prime Levels system which is modeled on the pivot point system of trading.
For booking profits we have revisited the age-old pivot point system of trading and worked on it by applying principles of market profile especially volume profile.
Prime pivots explained :
The pivot point system works around the pivot point which is calculated by five different methods, that I know of. The system calculates the closing price, the high price and low price of the day and in some cases even the open price and arrives at the pivot point from where the remaining support and resistance levels are derived.
What we found through our observations was :
a) The high price and the low price of the day are usually areas of low volume, hence the system was biased towards low volume trades.
b) The closing price is actually an average price of the last 30 minutes of trade, and the relation of that with the next day’s activity wasn’t very clear.
c) If the open price is taken in the calculation it is also an area of low volume and in some cases odd ticks and even false trades.
We flipped the system around to arrive at a prime point zero or PP0 which is a combination of the highest volumes traded at the Volume point of control and the price point of control, serving us as some kind of a centre point for the day.
We believe the market will be positive above this one number PP0 and attract buying efforts as long as it stays above it.Similarly it will be weaker below this PP0 level and attract selling efforts.
We also computed the Prime support ( PS1) and the Prime resistance ( PR1) about 70 % equidistant from this PP0 or 35 % above it. The 70 % ( actually 68.3 %) number comes from our computation of value area which is one standard deviation of price.
The remaining levels of Prime support 2 ( PS2) or Prime resistance 2 ( PR2) are calculated similarly.
The Prime Pivot system also called power levels is a trading system in itself with a bias becoming strongly positive as the market moves from PP0 to PR1 to PR2, PR3 etc.
Likewise the selling power increases from PP0 to PS1 to PS2, PS3 etc.
In the charts above, the buy sell triggers are given on twitter, as well as the part booking points are suggested to close a part of the trade in profit.
