Back to: Trading with Smart Money
Pivot Point Trading Strategies
In this article, I am going to 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.
- Where to enter the trade
- When to exit the trade
- How to place your stop
- 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.
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 a number of 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 use to determine trend directional
- Pivots project price level where the price is likely to 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 use to determine trend directional
Filter trades in the direction of the trend. Avoiding trading against the trend
- Uptrend (HIGHER PIVOT)
- Downtrend (LOWER PIVOT)
Pivot Point Trading Strategies
Pivots project price level where the price is likely to face support or resistance.
Pivots POINTS can give entries when trading in the direction of the trend. The chart ABOVE a downtrend, showing how 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 have to 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, then you have to 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, which is 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, which is 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 at least 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 MIN 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 am going to discuss Central Pivot Range Trading Strategy. Here, 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.
1 thought on “Pivot Point Trading Strategies”
Sir where is the video link for this in you tube?
Can you share link.