Algorithmic and Program Analysis and Tendencies With PivotBoss AAII 2018

PRESENTS
ALGORITHMIC AND PROGRAM

ANALYSIS AND TENDENCIES
with Frank Ochoa
President and Founder, PivotBoss, LLC
Author, Secrets of a Pivot Boss
GOALS AND AGENDA
Algorithmic and Program Trading has made an enormous impact on the markets, and with
how traders engage the market. Understanding how these algos and programs work allows
traders to trade alongside the machines, instead of against them.
GOALS: AGENDA:
1. How to identify hidden prices so you can find 1. Introduction to Algos/Programs
and trade high-probability opportunities
2. Models and Hidden Levels
2. How to recognize future price momentum
ahead of the crowd 3. The Rejection Signature
3. How to spot the signatures and tendencies of 4. Live Chart Analysis and Prospecting
algorithms and programs so you can profit
from the impending moves
INTRO TO ALGOS/PROGRAMS
They Get a Algorithmic Trading gets a bad rap, and with good cause sometimes, but the algos bring
Bad Rap liquidity and volatility, and at the end of the day, that’s what traders need to trade.
The Algos Leave The Algos leave behind distinct signatures. Once you learn to read the signature,
you can then begin to engage the market like the algos, riding on the coattails of
a Signature the waves of volatility and volume they bring.
An Algo can be very simple, like returning all of the instances

The Algos Can Be Simple where two bars of data have the same high price, or the same
low price. On the other hand, Algos, and the Programs that
or Extremely Complex deploy them, can also be extremely complex, perhaps including
extremely complex mathematical formulas and modeling.
When a trader/developer creates an algorithm that tests out as a winner, they basically copy
Algos Copy and paste that basic recipe and apply it to an entire catalog of data, looking to add any
and Paste quantifiable edge to existing algos and programs. The basic “If-Then-Else” statement used
by the Algos is seen at work at many of the key levels that we trade — and that is by DESIGN.
MODELS AND HIDDEN LEVELS
The Basic Algo “If-Then” Model is applied to any and all data points from a market, from the Open price to
the Previous Session’s Close, from the Volume Point of Control to FOMC-based events.
The Basic Algo “If-Then” Model Key Data Points (Prices)

IF [PIVOT] “GOES_BID” Algorithms Use the Most
THEN “BUY_RETEST” of [PIVOT] AND “BUY_PULLBACKS”
• Volume-Weighted Average Price (VWAP)
ELSE IF [PIVOT] “GOES_OFFERED” OR “FAILED_NEW_HIGH” • Previous HLC (yHI, yLO, yCL)
THEN “REVERSE_BIAS” • Current Day’s Open (O)
• Midpoint (MID)
Other Events that Trigger Algorithms • Volume Point of Control (VPOC)
• ABCD Measured Moves • Average Daily Volume • Overnight Pivot (ONP)
• Fibonacci Levels • FOMC-Based Events • Price Extensions
• Average Daily Range • Economic News/Reports • Standard Deviations (SD)
The Absorption Signature
As traders, the ability to forecast, identify, and diagnose a developing top or bottom in the
market is crucial. The PivotBoss Approach to spotting these significant events is
recognizing The Absorption Signature, which occurs in all timeframes.
1. Absorption Signature: When OTF Responsive Participants absorb a price level after a recent top or bottom, a distinct
signature is revealed — The Absorption Signature, which helps to pinpoint major turning points in a market. Some of the
most significant tops and bottoms occur with this signature attached — IN ALL TIMEFRAMES!
2. Rejection Day: When the market probes through current support or resistance after an extended price discovery phase, but
fails to establish acceptance beyond that key pivot, a Rejection Day develops. This is a significant day, and typically develops a
long tail, ideally marking the new top or bottom of the recent price discovery phase.
3. Absorption Zone: After the Rejection Day, OTF Responsive Participants will look to absorb prices at The Absorption Zone,
which is a zone somewhere between the midpoint of the rejection day (or tail) and the previous support or resistance level
whose breach sparked the rejection. Responsive participants will absorb many rotations into this zone, which builds energy for
the squeeze or liquidation to come.
4. Re-Absorption Signatures: The Market may see many Absorption Signatures throughout the life cycle of a trend, which are
designed to provide extra fuel to the existing, ongoing price move. These are called Re-Absorption Signatures.
5. Failed Absorption Signatures: Passive Participants can and do have their stops run, which can spark significant
momentum moves, especially if OTF participants are on the losing side. Should an Absorption Signature fail, it likely forecasts a
resumption of the current trend.
PRESENTS
ALGORITHMIC AND PROGRAM

ANALYSIS AND TENDENCIES
with Frank Ochoa
President and Founder, PivotBoss, LLC
Author, Secrets of a Pivot Boss

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PRESENTS

ALGORITHMIC AND PROGRAM

An Algo can be very simple, like returning all of the instances

The Basic Algo “If-Then” Model Key Data Points (Prices)

ALGORITHMIC AND PROGRAM

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