Pivot point levels | How to day trade with pivot point.
Pivot point Nothing But Support and Resistance Levels, Calculated based on the average price of High/Low/close of the previous periods.
It is turned around and reverses.
It is a Leading Indicator not lagging Indicators Like RSI, SMA, or Bollinger Bands. And It is purely driven by price.
It is very important for day trading because we use daily’s pivot Points in our trading style.
There are many types of Pivot Points but most important is CPR (Central Pivot Range).
Before going to trade you must know CPR on your trading chart.
And CPR is a three-line combination.
It is the price area above the current price where prices stop for further upside or advances.
R1 = (PP ∗ 2) − Previous Low.
R2 = (PP) + (Previous High − Previous Low).
R3 = (Previous High + 2 ( PP – Previous Low).
Pivot Point = (Previous High + Previous Low + Previous Close) / 3.
It is the price area below the current price where prices decline for going further down or Stop and Reverse.
S1 = (PP ∗ 2) − Previous High.
S2 = (PP) − (Previous High − Previous Low).
S3 = (Previous Low – 2 (Previous High – PP).
You can use this Leading Indicator(CPR) on your chart by www.tradingview.com
Visit the above site then go to the chart option and then put CPR on your chart.
R3 = 1.3636
R2 = 1.3075
R1 = 1.2776
PP = 1.2514
S1 = 1.2215
S2 = 1.1953
S3 = 1.1392
Now it is a very important thing that how we will open trade according to these pivot point levels and how?
OK. Don’t worry. First of all, you have to consider PP(1.2514) this midpoint or CPR of GBP/USD = 1.2514.
Now you have to check the current price of GBP/USD in Market of Watch of MT 4.
If it is above PP(1.2514) really it means Bullish sentiment.
If it is below from this PP(1.2514) it means Bearish sentiment.
Congratulations you must be very happy!! Why ???
because now you know Bullish & Bearish Sentiment.., So What and what is next ???
Keep some points in mind that R3 is the Overbought Area.
So Never go for long.
S3 is the Oversold Area. So Never go for short.
Buy when the current market price above the pivot point and below R1.
Sell when the current market price below the pivot point and above S1.
so we will meet soon!!!
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