A Complete Guide to Technical Trading Tactics: How to Profit Using Pivot Points, Candlesticks & Other Indicators
Author: John L. Person Categories: Technical Analysis, Day Trading, Futures & Commodities
Quick Summary
A practitioner's guide to integrating pivot point analysis with candlestick patterns, Western chart analysis, and technical indicators for trading futures, options, and stocks. Person, a 23-year veteran futures broker, presents the P3T (Pivot Point, Price Pattern, and Time) trading methodology with specific focus on mathematically calculated support and resistance levels derived from daily, weekly, and monthly timeframes.
Detailed Summary
John L. Person's "A Complete Guide to Technical Trading Tactics" is a practitioner-authored guide to multi-method technical analysis with a distinctive emphasis on pivot point calculations as the integrative framework for trading decisions. Drawing on 23 years of experience as a registered futures and options broker, Person presents a methodology that combines mathematically derived support and resistance levels with pattern recognition and indicator confirmation.
The book opens with a thorough introduction to futures and options mechanics, covering margin requirements, contract specifications, leverage calculations, and the structural differences between futures and equity markets. This foundational material ensures accessibility for traders transitioning from equity-only backgrounds while providing useful context for experienced futures traders.
The fundamental analysis chapter addresses supply-demand dynamics, economic growth and productivity effects on commodity and financial futures, and the role of major economic reports in driving market prices. Person argues that fundamentals provide the directional bias while technical analysis provides the timing and execution framework.
The technical analysis section covers Western-style bar chart analysis (including key reversal patterns), point-and-figure charting (which focuses exclusively on price action without time distortion), and market profiling concepts. The candlestick charting chapter provides detailed coverage of major reversal patterns (hammers, hanging men, engulfing patterns, dojis, spinning tops, morning and evening stars) and continuation patterns, with examples drawn primarily from dollar and bond futures. Person's treatment integrates candlestick signals with Western support/resistance levels, arguing that confirmation from multiple methodologies dramatically improves signal reliability.
The chart analysis chapter covers volume and open interest interpretation rules specific to futures markets, classical chart patterns (M tops, W bottoms, head-and-shoulders, triangles, pennants, flags, diamonds, wedges, funnels), gap analysis (breakaway, runaway, exhaustion, common), island reversals, rounded bottoms, "oops" signals, and opening range breakout techniques.
The pivot point analysis chapters represent the book's core contribution. Person presents the pivot point formula (P = (H + L + C) / 3) and its derived support (S1, S2, S3) and resistance (R1, R2, R3) levels as mathematically objective reference points for identifying likely turning points. Unlike subjective trendline or pattern analysis, pivot points provide specific price levels calculated in advance. The P3T trading technique (Pivot Point, Price Pattern, and Time) integrates these calculated levels with candlestick and chart pattern confirmation and timing analysis. Critically, Person advocates calculating pivot points not only from daily data but also from weekly and monthly charts, arguing that confluence between multiple timeframes' pivot levels creates the highest-probability trade zones.
The technical indicators chapter covers moving averages, MACD, stochastics, Gann key numbers, Fibonacci ratios and projections, time cycle analysis, and Elliott Wave theory. Person's approach is integrative rather than prescriptive -- he advocates using multiple indicators to verify and confirm what pivot point analysis suggests, rather than relying on any single methodology.
The market sentiment chapter addresses contrary opinion analysis, Commitments of Traders reports, margin rate changes, the Market Vane Bullish Consensus report, put-to-call ratios, and the VIX volatility index. The trading psychology chapter covers fear management, discipline development, confidence building, the "I'll-think-about-it syndrome," and stress relief techniques. The tactical trading chapter provides specific techniques including pyramiding approaches, scale trading, stop reversals, momentum breakout trading, the "Friday 10:30 a.m. rule," and multi-contract management strategies.
The options primer provides sufficient coverage for futures traders to understand how options can complement their directional trading, covering basic puts and calls, premium components, the Greeks, strangles, straddles, and eight specific option spread strategies.
