PPS Technical Indicator aka Person’s Pivots
The Person’s Pivot Study indicator on ThinkorSwim is without a doubt my favorite of all the indicators. It’s easy, it’s effective, and oh, did I mention it’s easy…
The PPS study was designed and developed by a man named John Person’s. A 32 year veteran of the Futures and Options markets, he’s been just about everything from a floor trader to a broker and even an analyst, but I’ll stop there and leave the history lessons for someone better suited to it. Whether he’s a financial genius or the guy serving fries at McDonald’s, it really makes no difference to us.
The Person’s Pivot study is a bullish and bearish momentum indicator. The study via thinkorswim (I can’t comment on other platforms) comes packaged with two moving averages, one fast and one slow that help determine a buying or a selling signal. Don’t know what moving averages are? Take a look at my moving averages page.
Interestingly, there isn’t a clear cut explanation for what triggers a buy or sell signal via the indicator. Mr. Person’s has decided to keep that to himself I suppose, but from what I can determine;
A signal is produced on these conditions;
- Trend condition changes from bearish to bullish.
- New higher high, new higher low, new higher open, and new higher close.
- Close above a past high.
- Trend condition changes from bullish to bearish.
- New lower high, new lower low, new lower open, new lower close.
- Close below a past low.
If anyone has more information about the construction of this indicator please share in the comments for everyone. I for one am interested to hear about it.
Whatever determines a bullish or bearish signal, it works… so I use it! Take a look at the screen shot below, then test it on your own charts to see how effective it really is.
I think you’ll find that of all the technical indicators out there, none is more straightforward and clear in its instruction. An up arrow means the market will move higher, and a down arrow means the market’s heading lower, that’s it. How’s that for simplicity?
Check it out and let me know what you think…
Click to Enlarge.