How to trade using the Pivot (Points) Levels?

The main Pivot Level is the most important level [( Yesterday High + Yesterday Close + Yesterday Low )/3] . In a trading day, if the price opens under this level, it means the price has a stronger tendency to go down and Bears are stronger. So we can take a short (sell) position. If the price opens above the Pivot Level, it means Bulls are stronger and we can take a long (buy) position. All other levels may work as support and resistance and so we have to be careful when the price reaches them.

For me, the Pivot Levels will be considered as the potential support/resistance levels and I will not take any position just because the price is opened below or above the main Pivot Level. I use my technical analysis, find patterns and pennants and will have an eye on the Pivot Levels to close my trades on time before I lose my profit. I consider this rule that if the price is opened above the main Pivot Level, it may go up and visa versa. Then I wait for a breakout and will take the proper position.

Pivot Point = ( Yesterday High + Yesterday Close + Yesterday Low )/3
Then we have Resistance 1 and Support 1 or R1 and S1:
Resistance 1 = ( Pivot Point x 2 ) - Yesterday Low
Support 1 = ( Pivot Point x 2 ) - Yesterday High
Pivot Point, R1 and S1 are the most important Pivot Levels but we can also calculate the Resistance 2 and Support 2 or R2 and S2.
Resistance 2 = Pivot Point + ( Yesterday High - Yesterday Low )
Support 2 = Pivot Point - ( Yesterday High - Yesterday Low )

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Tags: Tranning trading

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Tags: Relax

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Born:	South Acton, Massachusetts, in 1877; Died in 1940
Affiliations:	Individual investor
Most Famous For:	Jesse Livermore was a highly visible stock trader and speculator for almost fifty years. He was famous for making and losing several multimillion dollar fortunes during his professional career.

Personal ProfileIn his early teens, Livermore left home to escape a life of farming. He went to Boston and started his long career in stock trading by posting stock quotes for the Paine Webber brokerage firm.

He then began trading for himself and by the age of fifteen, he had reportedly produced gains of over $1,000, which was big money in those days. Over the next several years, he made money betting against the so-called "bucket shops," which didn't handle legitimate trades – customers bet against the house on stock price movements.

He did so well that he was banned from all of the shops in Boston, which prompted his move, at age 20, to New York where his speculative trading successes - and failures - made him a celebrity on Wall Street and around the world. His financial ups and downs finally ended tragically with his suicide death at the age of 63.

Investment StyleJesse Livermore had no formal education or stock trading experience. He was a self-made man who learned from his winners as well as his losers. It was these successes and failures that helped cement trading ideas that can still be found throughout the market today.

Some of the major principles that he employed include:

• Money is not made in day trading on price fluctuations. Livermore emphasized the importance of focusing on markets as a whole, rather than on individual stocks. He noted that greater success comes from determining the direction of the overall market than attempting to pick the direction of an individual stock without concern for market direction.
• Adopt a buy-and-hold strategy in a bull market and sell when it loses momentum. Livermore always had an exit strategy in place. 
• Study the fundamentals of a company, the market and the economy. Livermore separated successful investors from unsuccessful investors by the level of effort they put into investing.
• Investors who focus on the short term eventually lose their capital.
• Ignore insider information; make your own independent analysis. Livermore was very careful about where he got his information and recommended using multiple sources.
• Embrace change in adapting investing strategies to evolving market conditions.

Publications

• "How to Trade in Stocks"by Jesse Livermore (1940)
• "Reminiscences of a Stock Operator" by Edwin Lefevre (1923)
• "Jesse Livermore – Speculator King" by Paul Sarnoff (1985).
• "Trade Like Jesse Livermore" by Richard Smitten(2004).

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Tags: Billionaire trading

Born: Omaha, Nebraska, in 1930
Affiliations:

• Buffett-Falk & Company
• Graham-Newman Corporation
• Buffett Partnership, Ltd.
• Berkshire Hathaway, Inc.

 Most Famous For: Referred to as the "Sage" or "Oracle" of Omaha, Warren Buffett is widely viewed as one of the most successful investors in history.
Following the principles set out by Benjamin Graham, he has amassed a personal multibillion dollar fortune mainly through investing in stocks and buying companies through Berkshire Hathaway. Shareholders in Berkshire Hathaway who invested $10,000 in the company in 1965 are above the $50 million mark today. Now in his 70s, Buffett has yet to write a single book, but among investment professionals and the investing public, there is no more respected voice.
In 2006, Buffett announced that he would pledge much of his reported $44 billion in stock holdings to the Bill and Melinda Gates Foundation ($31 billion) and four other charities ($6 billion) started by members of his family.

 Personal ProfileWarren Buffett graduated from the University of Nebraska in 1950 with a Bachelor of Science degree. After reading "The Intelligent Investor" by Benjamin Graham, he wanted to study under Graham, and did so at Columbia University, obtaining his Master of Science degree in business in 1951.

He then returned to Omaha and formed the investment firm of Buffett-Falk & Company, and worked as an investment salesman from 1951 to 1954. During this time, Buffett developed a close relationship with Graham, who was generous with his time and thoughts. This interaction between the former professor and student eventually landed Buffett a job with Graham's New York firm, Graham-Newman Corporation, where he worked as a security analyst from 1954 to 1956. These two years of working side-by-side with Graham and analyzing hundreds of companies were instructive years that formed the foundation for Buffett's approach to successful stock investing.

Wanting to work independently, Buffett returned home once again to Omaha and started a family investment partnership at age 25 with a starting capital base of $100,000. From 1956 to 1969, when the Buffett partnership was dissolved, investors, including Buffett, experienced a thirty-fold gain in their value per share. Prior to the final decision to liquidate the partnership, Buffett had acquired the unprofitable Berkshire Hathaway textile company in New Bedford, Massachusetts, in 1965. After acquiring Berkshire, Buffett effected a successful turnaround of the company, which focused on changing the company's financial framework. Berkshire kept its textile business, even in the face of mounting pressures, but also used the company as a holding company for other investments.

It was in the 1973-74 market collapse that Berkshire got the opportunity to purchase other companies at bargain prices. Buffett went on a buying spree, which included an investment in The Washington Post. The rest is history and today, Berkshire Hathaway is a massive holdings company for a variety of businesses with assets and sales totaling, approximately, $240 billion and $100 billion, respectively, for year-end 2006.

Investment StyleWarren Buffett's investing style of discipline, patience and value has consistently outperformed the market for decades.

John Train, author of "The Money Masters"(1980), provides us with a succinct description of Buffett's investment approach: "The essence of Warren's thinking is that the business world is divided into a tiny number of wonderful businesses – well worth investing in at a price – and a large number of bad or mediocre businesses that are not attractive as long-term investments. Most of the time, most businesses are not worth what they are selling for, but on rare occasions the wonderful businesses are almost given away. When that happens, buy boldly, paying no attention to current gloomy economic and stock market forecasts."

Buffett's criteria for "wonderful businesses" include, among others, the following:

• They have a good return on capital without a lot of debt.
• They are understandable.
• They see their profits in cash flow.
• They have strong franchises and, therefore, freedom to price.
• They don't take a genius to run.
• Their earnings are predictable.
• The management is owner-oriented.

PublicationsBuffett has not, as yet, authored any books. However, his annual letters to the shareholders in Berkshire Hathaway's annual report are a suitable substitute. Back copies of these 20-page masterpieces of investing wisdom are available from 1977 through 2006 (updated annually) from Berkshire's Website.

• "Buffett: The Making of an American Capitalist" by Roger Lowenstein (1996).
• "Warren Buffett Speaks: Wit And Wisdom From The World's Greatest Investor" (1997)
• "The Warren Buffett Way" by Robert G. Hagstrom (2005)

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Tags: Billionaire trading