Need some advice on Pivot Points

Good day all

I was hoping if someone could give a lil insight on the pivot points, I’m busy with the school of pipsology. I just want to know from which previous session do I use if I want pivot points on the 15min timeframe

Hello, Portchie

[I]On chart time-frames lower than Daily[/I] – such as your 15-minute time-frame – most traders would plot [I]Daily Pivots.[/I] And, my suggestion would be that you do the same.

But, you do have other choices. Weekly and monthly pivots are standard sets built into many charting packages, and you could choose one of these. Or you could calculate pivots (using a Pivot Point Calculator) based on a custom pivot time-frame of your own choosing, as long as the pivot time-frame you select is larger than your chart time-frame. That is, you could calculate 4-hour pivots (for example) and apply them (manually) to your 15-minute chart. But, you could not apply 15-minute pivots to a 4-hour chart.

As a beginner, you should stick to the normal use of pivot points, as follows:

• on time-frames lower than Daily (4-hour, 1-hour, 15-minute, etc.), use Daily Pivots.

• on the Daily charts, use Weekly or Monthly Pivots.

• on Weekly charts, use Monthly Pivots (or even Yearly Pivots, which you might have to calculate and plot manually, depending on the charting package you are using)

Many trading platforms and charting packages have built-in Pivot Point indicators which will automatically calculate and plot pivots, after you enter a few basic inputs. Exact details vary from one charting package to the next.

In order to illustrate pivot point set-ups, it makes sense for us to refer to a charting package that all readers of this thread have access to. That would be the [I]TradingView[/I] charts included here on the [I]Babypips[/I] site.

You can access the [I]TradingView[/I] charts by clicking on the [I][B]Rates[/B][/I] tab at the top of this page. From the menu that comes up, click on a currency pair. Let’s use USD/JPY for this discussion of pivot points. When you click on USD/JPY, the 60-minute USD/JPY chart will be displayed as the default time-frame. You can change the time-frame to 15 minutes using the tool-bar at the top of the chart.

Now let’s drop the USD/JPY chart into a separate window by clicking the [I]blue button[/I] in the upper right corner of the chart, and let’s expand the chart to full-screen.

And let’s apply [I]TradingView’s[/I] built-in pivot point indicator to the chart by clicking the [I][B]Indicator[/B][/I] icon on the top tool-bar, and selecting [I][B]Pivot Points Standard[/B][/I] from the menu that appears. (Note: click [I]Pivot Points Standard[/I] just once, and then close the menu).

Pivot Points are now on the USD/JPY 15-minute chart. The chart looks like this –

In the 3 lines of text at the top of the chart, the third line shows the default parameters of the pivot points that have been applied to the chart. The default parameters are: [I]Traditional[/I] (type), [I]Auto[/I] (pivots time-frame), and [I]15[/I] (number of pivots back).

[I]Traditional[/I] refers to the formulas used to calculate the pivot points, traditional being the most common.

[I]Auto[/I] refers to the time period on which the pivots are calculated, and you will notice that for this 15-minute chart the Auto (default) pivot time-frame is Daily Pivots.

And lastly, the number [I]15[/I] in the third line of text indicates that 15 days of Daily Pivots are plotted.

Notice how the pivot levels change from one trading day to the next. And notice also the time of day when new pivot levels are displayed: 2100 GMT each day. That’s 9 pm GMT, which corresponds to 5 pm New York time. This is the time typically used by forex traders to define the end of one trading day, and the start of the next trading day.

You can change any of the default parameters (pivot type, pivot time-frame, etc.), by clicking the [I][B]Format[/B][/I] icon on the third line of text, and making whatever changes you choose to select. You can also hide any, or all, of the 3 lines of text at the top of the chart. And you can delete the volume histogram bars at the bottom of the chart, if you so choose.

For now, let’s leave the [I]Traditional[/I] type, and the [I]15[/I] days of Daily Pivots, as they are. And let’s try out the optional pivot time-frames, presently set at the default [I]Auto[/I]. You will notice that the choices you have are [I]Auto[/I] (already selected), [I]Daily, Weekly, Monthly,[/I] and [I]Yearly.[/I]

If you click [I]Daily,[/I] nothing happens, because the [I]Auto[/I] default is already Daily Pivots.

If you click [I]Weekly, Monthly,[/I] or [I]Yearly,[/I] things change considerably. What’s immediately obvious is that the string of candles depicting price gets squeezed (vertically) down to a thin line. This is because Weekly, Monthly, and Yearly pivot levels are much farther away from current prices; and, in order to display all the levels, the entire chart has to be re-sized on the vertical axis.

Finally, if you change the time-frame of the chart to Weekly, and attempt to apply Daily Pivots to the chart, you will get an error message saying “You cannot see this pivot time-frame on this resolution” – because, as noted above, the pivot time-frame must be larger than the chart time-frame. So, a Weekly chart requires Monthly (or higher) Pivot Points.

I hope that helps to clear things up for you.

Welcome to this forum, by the way!

.

1 Like

Thanks a lot Clint, this does clear a lot of things up. Much appreciated. I enjoy babypips thanks

Thx a lot Clint

quick question

on time-frames lower than 4hrs i use Daily Pivots.

on the Daily charts i use monthly (sometime weekly)

the problem is with 4hrs and 8hrs, daily pivots r not good imo, should i use weekly?

thx

Camarilla pivots; all you’ll ever need.