Discover how to use Pivot Point in intraday trading.

How to use Pivot Point in intraday trading? Find out the most effective Pivot Point trading strategy to trade with, and get profitable results!

Do you want to know what is Pivot Point? Watch our latest video to find out how to use Pivot Point in intraday trading.

How to use Pivot Point in intraday trading – a simple, but effective guide

 

Now, Pivot Points are pretty common, they’re probably one of the first things that new traders learn about, along with moving averages and Bollinger Bands and the MACD or the Moving Average Convergence Divergence indicator. But if you’ve never used Pivots and you are using TradingView, we go to indicators, and then we just type in Pivot and we want the standard version and that will put it on our screen. Now, personally, I like to change the color to black and thicken the lines just a tad. And there we have our pivots. And also, if you go to inputs you can see that there are various different types of pivots that we can use. My personal favorite is using Woodies Pivots.

Now, Pivots, they just represent an area of support and resistance and they’re labeled. This is resistance one, this is the main pivot and this is support. So, resistance one means that when price is trading up it needs to break through this zone to go higher and support means when price is trading down to it, that the price will bounce off of it. Now, when you’re looking at this, it seems fairly easy to just say, “Well, when price goes up to a pivot line, we just short, or when it comes down to pivot line, we go long.” That doesn’t work. It doesn’t work for a lot of reasons, because we don’t know when it’s going to fail or not. So we need to use another tool in our trading toolbox. And what I like to use is the Relative Strength Index, that’s probably a very popular one, that people learn about right away in their trading, and then the other one is a less well-known called, The Composite Index. It’s essentially the RSI… If this is Windows 3.0, this is Windows 10, or whatever the best version of Windows is. This is better.

Now, how we use an oscillator in addition to pivot points is that we look for conditions that tell us that we’re going to have a type of reversal. For instance, when price was here and it was trading down, what did we see in our oscillator? We saw it was near the default oversold condition and that in the Composite Index the red line was below both of the averages so that creates a buying signal. So price was sitting on a pivot, we were near the default oversold condition and we had a buying signal. So yes, we could buy off that. And then when it came back down we still had a buying signal and we were at little trader’s discretion, whether you want to keep going long here. And then, we traded up. But then, what happened up here? What happened at this resistance line where it traded above it and came back down, which is normal. Generally, when you cross a new pivot line, above or below, price really just goes through it and then retest it again. It will retest frequently. So we did a retest, came back down, and we traded in. Instead, this line turned into support, but we didn’t find support. What if we did buy here? Price we know went down, but if we didn’t have the oscillators to confirm entry and we bought here, we would have lost some money on that trade.

Looking at our indicators, we are neutral in the RSI and we don’t have a sell signal on the Composite Index. And we can keep looking forward more and more and seeing more. This is a good short opportunity, because price came up to the pivot and then, look at our oscillators. Especially when they have a similar structure, that is something to pay attention to. So, we’re up near this resistance pivot and we are overbought on our RSI and we are extended above the two averages in the Composite Index, creating a sell signal. And so, this would be a good short opportunity, okay?

Again, if you put this into practice with your regular trading or if you don’t have a system that is working, this is not a system itself. This is just one simple strategy that you can use to trade and it can be very effective, especially if you are using longer time frames, on hourly and higher time frames, this is going to be the most effective and I hope you found this video helpful. Hope it helps you with your trading and have a wonderful day!

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