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A pivot point (or fulcrum) is a point around which future price movement is
expected to range
In fact they are used along with tools like candlestick, RSI etc.
When market opens above pivot point then it is likely to stay above it. Traders
may use this option to long and watch R1 as first resistance.
When market opens below pivot point then it is likely to stay below it. Traders
may use this option to short and watch for S1 as immediate support.
Some traders wait for 15-30 minutes to watch pivot point position to take
their call.
Stop loss for buy call can be S1 and stop loss for sell call can be S1 to control
losses.
Avoid using pivot point when some news that can affect price of the stock is
expected.
Pivot point prediction can be done only for next trading day.
Other useful information's helpful while learning Pivot Points
If price is influenced by external news then pivot point looses its significance.
Pivot point are not dynamic like moving average. Their value stay same
throughout the day.
Where H - Highest Price of Previous Day, L - Lowest Price of Previous Day, C Closing Price of Previous Day