Quote Originally Posted by Charl View Post
Hey Billy,

By targeting the daily pivot point beyond the Multi time-frame cluster as the trigger to exit the position - how can we further measure this "porsosity tolerance" in terms of volume to gauge the level of institutional support (behind this porosity) so that we don't get whipsawed out of a position?

IWM's price action yesterday seems to be a developing case study in our porosity lesson.

Thank you.
Charl.
Charl,
The daily levels are already included in the clusters and so, there is no porosity tolerance for them.
Porosity tolerance only makes sense for fixed levels such as QPP or MS1 to declare them broken on an intraday basis. Since clusters are constantly evolving from day to day and are already volatility-adjusted, there is no use for porosity tolerances with them. Either they hold or they are broken.

There is no certain relationship that I know of between volume and porosity with the pivots. The pivots are market makers levels of equilibrium on each timeframe. They will always whipsaw above and below the equilibrium level, playing the bid & ask spreads, while waiting for fresh institutional high volume orders. They will then break the consolidation fast in the direction of the new orders, entering new multi-timeframes positions for their own account, before high volume kicks in. The trick is that HFT programs are more and more often simulating such false moves to shake out weak hands before reversing strong and following-through in the opposite direction.
Billy