Trading Strategies: Using Pocket Pivots to Identify Institutional Accumulation

Trading Strategies: Using Pocket Pivots to Identify Institutional Accumulation


Hi everyone. This is Nick here from TraderLion with another
short video. Today we will be discussing pocket pivots. It’s a very simple concept, very useful concept
and after you watch this a few times or look at the PDF a few times, you should start to
be able to just see pocket pivots very quickly with your own eyes. So what is a pocket pivot? Pocket pivots are a way to identify institutions’
footprints within a base or an uptrend. Institutions buy within consolidation periods
and during uptrends. This buying will leave behind a volume signature,
and that volume signature is called a pocket pivot. So the institutions are the real movers of
the market. We can’t move the market; only the institutions
have the money to move the market. So we want to spot when they’re getting into
things, and we want to follow along and so the pocket pivot helps us identify when they’re
getting in. So a few rules on the pocket pivot. It should emerge within, or out of a constructive
basing pattern. Institutions are going to be buying while
a stock is consolidating or in a solid uptrend. So you definitely want to have a constructive
basing pattern when you see this pocket pivot, not when it’s extended. So the day’s volume must be larger than any
down volume days over the prior 10 days. This is the definition of a pocket pivot. This is what you’re looking for and we’ll
get into an example of this. So do not buy pocket pivots if the stock has
been in a five-month or longer downtrend. You don’t want to buy anything when it’s in
a downtrend. The trend is your friend, remember that and
institutions are not going to be buying, and if they are in fact buying a stock in a downtrend
and it is going to turn around, you wait for that validation that it’s turning around. Last but not least, we spoke about this earlier,
do not buy pocket pivots that occur after the stock has already extended from its base. The institutions are not buying into an extended
move. They are in before the move even happens. So you do not want to buy any pocket pivots
that you see on a stock that’s extended from its base. So now let’s get into [inaudible 00:01:59]
examples here. First up, we have VIRT. Here you’ve got a pocket pivot greater than
any of the previous 10 days. Another pocket pivot. Another pocket pivot. Now this one occurred, breaking the prior
high. It’s still a pocket pivot, as it is still
near its averages and in that consolidation period. And so you see, after that, it moves up following
that 10-day moving average and so we have a pocket pivot right here as well, right off
of the 10-day average. So it’s very tight. It’s consolidating. It’s already moved up from here but it’s consolidating
and now it is picking up off its 10 days. So this our institutions leaving a footprint
behind and what happens? This is earnings volume right here, but you
can see that they were buying it beforehand. If you look over here, we have a pocket pivot
on this day and it’s within a base. So this is one you really want to pay attention
to, our institution buying into this base. This is a pocket pivot. So VIRT a very interesting chart. So now let’s get to Weight Watchers. Weight Watchers I thought it was a good example. So if you look to the left of the chart here,
it doesn’t look too significant, but relative to what it’s had, it’s a pretty significant
day. So we’ve got a pocket pivot and the stock
trends higher. Now this is earnings volume, so we ignore
that. But if you move over here, this is earnings
volume as well, you ignore that, but the stock is moving sideways. So how do you get in early by identifying
pocket pivots? We’ve got pocket pivot right here and a pocket
pivot right here within its base and then look. It starts to move back into an uptrend from
this area. So the institutions were buying Weight Watchers
while it was consolidating and how would you know before the move actually happened? By spotting the pocket pivots. So this is just a very brief overview on pocket
pivots. I hope it helped. We will have a few more videos more in-depth
on it but overall it’s a very simple concept. You don’t want to over-complicate it at all. You definitely want to know when to consider
that signature of pocket pivot or not if the name is extended. So, thank you. Have a fantastic evening and I will see you
in the next video.

5 Comments

  • Zahir Karim

    April 7, 2018

    great explanation Nick – clear and concise

    Reply
  • DigitalHalftones

    April 9, 2018

    Do you base the volume off of a daily chart?

    Reply
  • tiago cardoso

    April 15, 2018

    Really useful, thank you.

    Reply
  • Rahul Gautam

    July 10, 2018

    Great explanation Nick ! Looking forward to more videos for Trader Lion

    Reply
  • Johnathan Fox

    November 27, 2018

    Great! Thank you!

    Reply

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