Daily Pivot point is a pivot point based intraday trading system, which can be used by traders as a possible indicator of market movement. Pivot points are nothing but support and resistance levels which are key trading tools in any market.
Pivot Points for today’s intraday charts would be based solely on yesterday’s high, low and close. Once Pivot Points are set, they do not change throughout the day. Let’s try to understand the working of this Daily Pivot Points trading system.
Daily Pivot Points Overview
Midpoint of the pivot indicator is main tool for the trend identification. If price moves above the midpoint then trend is down and traders should look for only long trades.All the levels which are above the midpoint will act as resistance. If the price is forming a higher high and higher low pattern and gives a breakdown from the support level then the next support becomes the target.
Daily Pivot Points Explanation
If the price moves below the midpoint then the trend is down and traders should look for short trades. All the levels which are below the midpoint will act as support levels. If the price is forming a lower high and lower low pattern and gives a breakdown from the support level then the next support becomes the target.
When price is in trading ranges, pivot point will provide support and resistance and often become the turning points for the direction of price movement. In Sideways market traders can trade the reversal moves on the basis of price action near the pivot levels.
Blueline can be used for stop loss and trail stop loss level. Since Daily Pivot point is an intraday trading system, traders should use this system in 5 minutes or 15 minutes time frames.
Daily Pivot Points: Buy conditions
- Price forming higher high and higher low structure.
- Price is trading above the midpoint of the pivot.
- Breakout from the resistance level is a trigger for a long.
Daily Pivot Points: Sell conditions
- Price forming lower high and lower low structure.
- Price is trading below the midpoint of the pivot.
- Breakout from the support level is the trigger point for short trades.
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