Mnikolic Investment Research
intelligent trading algorithms™
Mnikolic Investment Research
intelligent trading algorithms™

Overview

Sigma Pivots (both Standard and Premium publications) are calculated using a quantitative model framework developed and maintained exclusively by Marko Nikolic. Each projection is derived through combination of algorithmic calculations, based on aforementioned models, and manual validation, performed by Marko Nikolic himself. A lot more information on Sigma and its methodology is available here.

Interpreting Projections

Each Sigma publication is comprised of 2 main parts: descriptive elements, and, of course, the pivot projection levels. Both will be explained using Sigma publication specimen below.

Understanding descriptive elements (points 1-5 on specimen):

  1. Date of publishing - displays precise day and time of Sigma forecast publication. Time zone is always Greenwich Mean Time (GMT/UTC) - unless you are logged in, and have your profile time zone set to local.
  2. Target market - the market applicable to this particular forecast. Full market name is stated first, followed by the exchange and symbol in brackets.
  3. Market hours - tells you when the market is open. These are the exchange session times for the target market above. Typically includes 2 time zones, one GMT, the other local (exchange's geographical location) or popular. Useful for 24-hour forecasts as they remain valid for the full duration of a single session.
  4. Term outlook - in simpler terms - duration. Tells you how long the forecast is valid for, in reference to Date of publishing. Another way to think of it is: the pivot projections are only good until Date of publishing + Term outlook.
  5. Forecast quality: This compound rating reflects the quality, probability, and reliability of the forecast. As previously explained, projections are based on multiple inputs. The Forecast quality number is a weighted score, the maximum range of which is 100, which averages expected performance based on individual quantitative methods used to derive the forecast.

Understanding projections (point 6):

In the financial trading world, pivots are price levels expected to attract intense supply-demand interaction. In other words, this is where buyers and sellers of a security are most likely to meet. It is precisely for this reason that most market makers and professional traders incorporate pivots (either the floor trader type or custom) into their strategy. How you calculate pivots (comprised of the central pivot point and surrounding support/resistance lines) depends on your formula. Sigma pivots are based on a statistical-quantitative framework.

The Sigma Pivot Projections section is comprised of 7 rows:

  • In the center, often closest to price at session open, we have the Pivot Point (PP). Price action below this level is said to be bearish, and above, bullish.
  • Resistance 1 (R1), Resistance 2 (R2), and Resistance 3 (R3) are the price levels forecasted to provide most resistance to climbing price action. These are often areas where long position holders take profit or decide that security is getting overvalued (long momentum exhaustion).
  • Support 1 (S1), Support 2 (S2), and Support 3 (S3) are the price levels forecasted to provide most support to falling price action. These are often areas where short position holders take profit or decide that security is getting undervalued (short momentum exhaustion).

Weekly and monthly forecasts may include additional support/resistance levels (e.g. R4, S4) to compensate for longer term outlook and hence potential for greater price movement range.

General rule of thumb: pivots that get decidedly broken (rather than just pierced) by price action from below become new supports, while those broken from above become new resistance levels.

Copyrights

Sigma Pivots and all associated text, images, media, techniques, strategies, and models (collectively "Sigma Media"), are sole intellectual properties and copyrights of Marko Nikolic Investment Research. You may NOT reproduce any of the Sigma Media without our prior explicit permission. See Terms of Service, Copyrights and Licensing pages for more information.

Disclaimer

Although Sigma Pivot forecasts are highly accurate - approximately 75% of the time - they are not perfect. Marko Nikolic Investment Research is not responsible for any losses you may incur as result of using Sigma Pivots. By using Sigma Pivots in your trading, you are agreeing to our Disclaimer.

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