Pivot points are a widely used tool among intraday traders because they help identify potential support and resistance zones throughout the trading day. Calculated using the previous day’s high, low, and closing prices. Begin your analysis by the main pivot point by summing the three values and dividing the total by three. This produces the central pivot level, which acts as a reference point for the day’s price action.

From this central pivot, you can derive additional support and resistance levels. Commonly, two support levels and two resistance levels. To find the first support, subtract subtracting the previous day’s high from twice the pivot point. The first resistance level is found by subtracting the previous day’s low from twice the pivot point. The extended levels use more complex formulas that incorporate the prior day’s trading range, but most trading platforms calculate these without manual input.

Once you’ve established your pivot levels, use them to shape your strategy. When trading begins above the pivot suggests bullish sentiment, and traders may enter long positions at R1 or R2. A gap below the central level signals bearish momentum, and traders might target declines toward lower pivot zones.

Never overlook the fact that pivot points are most effective alongside other indicators like RSI, MACD, and pin bars. A strong signal emerges when a doji, shooting star, or engulfing pattern appears along with declining volume, it could be a compelling reason to exit longs. Similarly, if the price bounces off S1 with strong buying volume, it might be a prime time to enter a long trade.

They don’t guarantee success, آرش وداد and prices can ignore levels during news-driven moves. This makes it critical use stop losses and adhere to strict position sizing. A common practice is to place stops just past the adjacent support to avoid large drawdowns if the market moves against them.

The most active period for pivot trading is the initial 90–120 minutes of the trading session, as this is when volatility is highest and pivot levels are most respected by market participants. Tracking reactions near key pivots during this window can reveal clear entry signals.

Tailor your pivot approach based on the specific instrument. Different asset classes may exhibit distinct behaviors at pivot zones due to differing market depth and volatility profiles. Validating your method using historical charts and trading in a simulated environment can optimize your entries and exits before risking real capital.

When pivot trading is executed with focus and combining them with sound risk management, intraday traders can enhance timing of entries and exits throughout the trading day.