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The logic of pivot trading

  • By Jim White,
  • Stocks and Commodities Magazine
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In 1998 I wrote a paper that became the foundation of a trading methodology I refer to as pivot trading. This methodology takes advantage of a fundamental characteristic of freely traded markets-that is, the persistence of price movement. This article will describe the underlying logic of the methodology, provide an example of the statistical verification of persistence, and outline how traders can use it to their advantage. Read on to learn more...

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1. Active Trader Services are available to investors in households that place 120 or more stock, bond, or options trades in a rolling twelve-month period and maintain $25K in assets across their eligible Fidelity brokerage accounts.

Technical analysis focuses on market action – specifically, volume and price. Technical analysis is only one approach to analyzing stocks. When considering what stocks to buy or sell, you should use the approach that you're most comfortable with. As with all your investments, you must make your own determination whether an investment in any particular security or securities is right for you based on your investment objectives, risk tolerance, and financial situation. Past performance is no guarantee of future results.

Article copyright 2012 by Technical Analysis Inc. Reprinted from the November 2008 issue with permission from Stocks & Commodities Magazine.
The statements and opinions expressed in this article are those of the author. Fidelity Investments cannot guarantee the accuracy or completeness of any statements or data.
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