Quantifying the Ideal "Daily Algo Pivot"

With the growth of Automated Trading Strategies, developers have designed increasingly more complex Algorithms. In most cases, we don’t believe that’s necessary. Quite often, the most effective solutions are the least complex.

Pristine Logic does not necessarily require convoluted Math.

Thus began our quest four years ago to create a more reliable methodology to Algorithmically define the single most important inflection price on the board each day: what we refer to as the “Daily Algo Bull-Bear Pivot.”

The theory was straightforward. By using Fractal Geometry and Multi-Cycle analytics, a series of Algorithmic support & resistance pivots are identified each day. And, if a series of pivot levels could be defined across multiple Cycles, then logically, there should also be a Quantitative formula to determine the single most important pivot price on the board.

We then set two additional goals.

The first was that the Algorithm would need to be run at least 90 minutes prior to the Day Session open, in order to define Risk on days in which key economic data is released before the open.

The second Goal was substantially loftier. The formula would need to be applicable to ALL financial instruments, with ZERO modification. (Of course, this precludes instruments that don't trade early enough in the morning to apply the Algo metrics).

In the end, Fractal Geometry did yield the Algorithm we sought. It’s been in use for four years, with thousands of chart images as verification of the methodology. We’ve applied the Algo to Index Futures, Individual Stocks, ETFs, Bonds, Commodities, Metals and Currencies.

Risk Management using the "Daily Algo Bull-Bear Pivot" is equally uncomplicated:

Long (or flat) Above. Short (or flat) Below.

In closing, it is appropriate to give credit where it is due. We didn’t invent these Cycles, nor the Fractal Geometry which defines its structure. It exists in Nature. We simply defined the Logic premise, and assembled the puzzle pieces.

And, as with so many innovations, this was not the product of “Complex Solutions”. But, rather, by simply asking the Right Questions.