How To Trade Pivots

Trading Pivots on the trading chart is a good way Forex and Volatility Index traders make profits daily.

Basically, you can calculate pivot points manually with Support and Resistance levels.

However, softwares, indicators, Expert Advisors and scripts are now available for traders.

With these tools, one can easily find the Pivot points on the chart.

How to trade Pivot point MOVEMENT

Calculation of Pivot Point:

In order to calculate pivot point, follow the steps below:

Pivot point (PP) = (High + Low + Close) / 3

Also calculate the Support and Resistance levels by using the steps below:

However, for the first level Support and Resistance, same as Support 1 and Resistance 1:

First resistance (R1) = (2 x PP) – Low price

First support (S1) = (2 x PP) – High price

Technically, for second level of Support and Resistance, same as Support 2 and Resistance 2:

Second resistance (R2) = PP + (High price– Low price)

Second support (S2) = PP – (High price – Low price)

Moreover, for third level of Support and Resistance, same as Support 3 and Resistance 3:

Third resistance (R3) = High price + 2(PP – Low price)

Third support (S3) = Low price– 2(High price – PP)

You may as well use Microsoft Excel work sheet, to easily program these steps for your every day use.

Do find below the image of Pivot Point computation excel sheet for Volatility 75 Index.

How to trade Pivot point using excel sheet

Kindly find below the image of Pivot Point computation excel sheet for EURUSD.

How to trade Pivot point EURUSD

How to trade Pivot point EURUSD price chart Do find below the image of Pivot Point computation excel sheet for XAUUSD.

How to trade Pivot point XAUUSD price chart

 

XAUUSD 4HR PIVOT ANALYSIS 27th APR 2021

Trading The Support Levels:

Support zones are floor levels or base levels where price is expected to reach and bounce or rise up.

Some Support levels, such as Support 1, Support 2 and Support 3 forms below the Pivot Point level.

A break and close of price below Support level 1 will give way to Support level 2.

At this point, Support level 1 will now become a Resistance level to Support level 2.

While the break and close below Support level 2 will give way to Support level 3.

At this point, Support level 2 will now become a resistance level to Support level 3.

Trading The Resistance Levels:

Resistance zones are the ceiling or top levels where price is expected to reach and fall or slide.

Some Resistance levels, such as Resistance 1, Resistance 2 and Resistance3 forms above the Pivot Point level.

A break and close of price above Resistance level 1 will give way to Resistance level 2.

At this point, Resistance level 1 will now become a Support level to Resistance level 2.

While a break and close above Resistance level 2 will give way to an upward movement of price to Resistance level 3.

At this point, Resistance level 2 will now become a support level to Resistance level 3.

Basically, price will normally continue in the direction it laps on the Pivot point.

The bullish price movement will continue if a Bullish candlestick opens below and closes above a pivot line.

See image below.

 

CANDLESTICK PATTERNS AROUND PIVOT LINE:

The nature of candlestick pattern formation around Pivot line is a pointer to price direction.

Trendline

 

The formation of a Bullish candlestick bar across the pivot line.

This indicates that the price may go up for some time.

How to trade Pivot point MOVEMENT

 

Formation of a Bearish candlestick Pin bar across the pivot line.

This indicates that the price may go down for some time.

 

How to trade Pivot point MOVEMENT pin bar

 

The candlestick pattern formation around the Resistance and Support levels is also very important.

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Support and Resistance

XAUUSD Pivot 27th April 2021

XAUUSD Pivot 26th April 2021

XAUUSD Pivot 23rd April 2021

XAUUSD Pivot 22nd April 2021

 

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6 Replies to “How To Trade Pivots”

  1. I like what you do sir but I want to ask do you have YouTube channel concerning trading gold…
    If not please not all the time but make some new videos on entry and exit points on gold..
    I will be thankful…

    1. Youtube channel name is Beanfxtrader. I will try to update videos for Gold analysis on the channel.

  2. I wuold like to tgank you for this informatio…Although i havent started to use this information in my trading ….i believe and trust it will improve the way how i trade….

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