Pivot Point Trading Strategies
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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.
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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?
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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.
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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)
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Pivot Point Trading Strategies
Pivots project price level where the price is likely to face support or resistance.
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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
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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
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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.
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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 to learn more
and clear your doubts.
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About the Author: Pranaya Rout
Pranaya Rout has published more than 3,000 articles in his 11-year
career. Pranaya Rout has very good experience with Microsoft
Technologies, Including C#, VB, ASP.NET MVC, ASP.NET Web API, EF, EF Core,
ADO.NET, LINQ, SQL Server, MYSQL, Oracle, ASP.NET Core, Cloud Computing,
Microservices, Design Patterns and still learning new technologies.
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