What is a Pivot? The Dictionary defines a pivot as a "central point around which something turns."And that's all there is to it.
These turning points are there all over the place in our charts,making definite lower pivot highs amd lows,so that a break is enough for us to get long.Vice versa for getting short.

The only criterion is that this point has to be visually obvious……it is a clear cut point…..not something that you need to see using microscopes,or magnifying glasses.Standing away from your computer,you must be able to make out your pivot.

A Pivot High is the high of a price bar which is higher than the highs of the bars surrounding it.
A Pivot Low is the low of a price bar which is lower than the lows of the bars surrounding it.

A it is not about 5 bars or 3 bars….it is not about major and minor,small or big… is just a point which is visually obvious to the simpleton watching a chart. Have a look at the chart below…



As the name suggests, its a bar which has a range wider than the average bars that we have for that security. There is no specific definition of what should be the range to a bar to define is as a WRB, but going through a few charts will make it amply clear.

Apart from the wider range, what we have to look for in a WRB is that it should have a bigger body and smaller tails…meaning there should ideally be lesser difference between the open and high/low as well as close and high/low depending on whether it is a bullish or bearish bar. In no case should thid difference exceed 20% of the total range of the bar. More at Foundations

Have a look at the chart below…..



2 bar rule states that we move our stops to the High of the bar which is placed 2 bars before the current bar in case we are Short. In case of Longs, it denotes moving stops to the Low of the bar which is placed 2 bars before the current bar.

Now this rule is NOT used as a matter of routine in this method. There are certain preconditions which kick in the applicability of this rule:
(a) There should be no Pivots or reversal points nearby. If pivots or reversal points are at least 5 bars away, then only should we use this rule.

(b) The move should be vertical. A limping move with smallish bars will not kick in this rule, even if the pivots are more than 5 bars away.

(c) There should be at least 1 biggish bar in the 5 bars between the pivots and the current bar so that we can use this rule.