Pivot Point Trading Strategies

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Pivot Point Trading Strategies

In this article, I will discuss Pivot Point Trading Strategies, i.e., How to Day and Swing Trade Using Pivot Points. At the end of this article, you will learn the standard pivot point trading strategy.

1. Where to enter the trade
2. When to exit the trade
3. How to place your stop
4. Target of trade

What are Pivot Points in Trading?

Pivots points, also known as ‘Classical Pivots or standard pivots. The pivot points are calculated according to past price data of high, low, and close and project the future levels of support and resistance.

How to Calculate Pivot Point?

The Pivot Point (STANDARD) is calculated in a simple way. 
PP=(high+low+close)/3
R2 = PP + (high-low)
S2 = PP – (High – Low)
R3 = High + 2(PP-low)
S3 = Low – 2(High – PP)

How to Add Pivot Points in Charts?

We recommend that you calculate these pivot points yourself; you can use pivot points provided by many online platforms and freely available in all trading terminals, including trading view.

How to Use Pivot Point in Intraday Trading?

The pivot points are calculated according to the previous day’s high, low, and close. it does not change and fix in all time frame

• Pivot Points can be used to determine trend-directional
• Pivots project price level where the price will likely face support or resistance.
• As pivots are based on past data. It does not change and fix in all time frames. It means it is not a lagging indicator.
• Pivots are used by all trade, including the big institution
• Pivots point as dynamic support and resistance

Pivot Points can be used to determine trend-directional

Filter trades in the direction of the trend. Avoiding trading against the trend

1. Uptrend (HIGHER PIVOT)
2. Downtrend (LOWER PIVOT)

Pivot Point Trading Strategies

Pivots project price level where the price is likely to face support or resistance.

Pivot POINTS can give entries when trading in the direction of the trend. The chart ABOVE a downtrend, showing how to price pullback towards the pivot (P AND R1) in a downtrend before continuing down. Traders can enter shortly after the price has reached the pivot points.

As pivots are based on past data, It does not change and fix in all time frame. Pivots point as dynamic support and resistance FOR different traders

• Investors – Yearly Levels
• Position Traders – Monthly Levels
• Swing Traders – Weekly Levels
• Day Traders – Intraday Levels

Pivot Point trading strategy

Pivot Point Breakout Trading

Entry: For standard pivot point breakout trade, you must open a position when the price breaks through a pivot point level with the trend. If the trend is bearish and the breakout is bearish, you must initiate a short trade. If the trend is bullish and the breakout is bullish, then the trade should initiate a long trade.

Stop Loss: A good place for your stop would be the last swing low/high, located somewhere before the breakout.

Target: You should trail and hold your pivot point breakout trade until the price reaches the next pivot level. This means if u trade a bullish R1 breakout, then trail and hold until R2 reach or trail stop loss hit

Pivot Point Rejection Trading

ENTRY: If the stock is reaching a pivot line from the upper side and rejection upwards, then you have to buy that stock. Conversely, if the price is reaching a pivot line from the lower side and rejection bounces downwards, then you should initiate a short trade. For rejection, the entry signal looks for any reversal candlestick pattern for the entry.

STOP LOSS: A good place for your stop would be the last swing, low/high, located somewhere before the rejection. the stop loss for this trade should be located above the pivot level if you are short and below if you are long.

TARGET: To be clear, pivot point bounce trades should be held until the price action reaches the next level on the chart. You should trail and hold your pivot point rejection trade until the price reaches the next pivot level. This means if u trade bullish R1 rejection, then trail and hold until P reach or trail stop loss hit

TIME FRAME 5 MINUTES FOR INTRADAY TRADING

As u can see, price testing R2 WITH WEEK MOMENTUM AND GOT REJECTED FROM R2. TARGET R1 REACH.

In the next article, I will discuss the Central Pivot Range Trading Strategy. In this article, I try to explain Pivot Point Trading Strategies. I hope you enjoy this Pivot Point Trading Strategies article. Please join my Telegram Channel and YouTube Channel as well as my Facebook Group to learn more and clear your doubts.