Pivot Point Project

I've been trying to do so many things this week other than trading that I almost forgot that this was my #1 goal.  I've started to write some more scripts to start my pivot point project.  Basically I'm going to crunch lots of data to try to understand their usefulness.  I'm planning on starting small and expanding as I go forward.  For instance, last night I analyzed pivot point data for the GBP/USD over 4 years to theorize whether the opening price being above or below the pivot point has any affect on the price for the rest of the day.  This test just happened to pop into my head first plus I was curious to know the results.  The pseudocode for this procedure is below. Pseudocode is not real code and is more natural looking so most people can understand.  It's much easier to code for real once you have the pseudocode.

Here are some questions that the results theoretically attempt to answer for the GBP/USD over the last 4 years:

1. "If the opening price is greater than the pivot point for a given day, will the price for the remainder of the day remain above the pivot point?"
2. "If the opening price is  less than the pivot point for a given day, will the price for the remainder of the day remain below the pivot point?"
3. "Will I have more wins than losses by opening a long position at the beginning of the trading day if the open is above the pivot point?"
4. "Will I have more wins than losses by opening a short position at the beginning of the trading day if the open is below the pivot point?"

The simple answers to all 4 questions are……………

NO, NO, NO, and NO!

The results were basically 50/50 meaning that 50% of the time if the price opened above the pivot point, the price stayed above the pivot point.

This is very simplistic but a start.  I have to finish importing tick data for other currency pairs which is time consuming.

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pivot_point;   # Pivot Point as calculated from the previous daily close
current_bid;   # The current bid price of the GBP/USD
opening_bid; # The opening bid price of the GBP/USD
closing_bid;   # The closing bid price of the GBP/USD
date = 2003-01-01;  # Starting date is January 1st, 2003 
true_counter; # A counter to keep track of true values
false_counter; # A counter to keep track of false values 

price_diff; # Difference between price a close to price at open.  If price is positive, long was profitable 

# Loop through all tic data from 
while (date <= 2006-09-30) { 

# Loop through all tic data for the day in order from open to close
while (open bid <= end bid ) {

    # If the open bid is above the pivot point 
    if (opening_bid > pivot_point) {

        # If long was profitable and price was up             
        If (price_diff > 0) { 

            # Increment the true counter
            true_counter ++;
        }

        # If short was profitable and price was down
        else if (price_diff < 0) {

           # Increment the false counter 
            false_counter ++;  
         }

…Repeat similar logic if the open bid is below the pivot point

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