When to observe pivot points

Trading Discussion
1

Hello traders,

Just a quick questions to those that use pivot points;

Bearing in mind that the rule of thumb is to look for long trades when the pivot opens below price, and short trades when the pivot opens above price, which timeframe are we looking at?

Is it the open of a 24hr period, ie after the NY session close, or do you reevaluate as each session opens?

Thanks for any thoughts on this.

Rez

2

Hello Rez, since this is part of daily analysis, better to take on the H1 and M30 time frames for your analysis.
As for when to analyze, preference for the European and American session due ton increased liquidity during this time.
Grix

3

Thanks Grix,

So for instance, if the euro session opens and price is below the daily pivot, but when the previous Sydney session opened, price was ABOVE the daily pivot, you would look for short trades? (Not taking other analysis into account).

I’m just trying to figure out if the opening price of each intraday session establishes a new bias in relation to where daily pivot is, or if the relationship between opening price for the entire 24hr period (sydney open) and the daily pivot are really all you should pay attention to?

Thanks

Rez

4

Hello Rez,

Pivots really useful in FX trading. But don’t blindly trust them. You cannot decide whether we are going up or down merely using pivots. You need to confirm this through an Indicator or Through Price Action Setup.

5

Hey Rez,
The directional bias at the open of a session or day isn’t as important because at the day unfolds there will be more moves that may shape the market. Secondly in trending markets, a counter trend signal may be a fake. So in brief, consider the trend, the market move so far, and what the top tier indicators and price action is indicating.

Grix

6

Hi guys,

Currently i am using Mark Brown bespoke pivot points.
And you have to deisgn your crib sheet/strategy to use them in line with the trend.
One way is to use swing high and lows and use time frame correlation.

I have attached the pivot points for the UK session as for 20062013.
And i have also attached a picture of GBPUSD on how it reacted to the pivot points.

  • Report Date 20130620 * AUDUSD
    Zone:3 Time:0500 <Price: 0.92445
    Resistance Level 2 …: 0.93395
    Resistance Level 1 …: 0.92933
    Pivot …Point 0 …: 0.92658
    Support …Level 1 …: 0.92196
    Support …Level 2 …: 0.91921

  • Report Date 20130620 * EURUSD
    Zone:3 Time:0500 <Price: 1.32540
    Resistance Level 2 …: 1.33144
    Resistance Level 1 …: 1.32862
    Pivot …Point 0 …: 1.32713
    Support …Level 1 …: 1.32431
    Support …Level 2 …: 1.32282

  • Report Date 20130620 * GBPUSD
    Zone:3 Time:0500 <Price: 1.54393
    Resistance Level 2 …: 1.55105
    Resistance Level 1 …: 1.54749
    Pivot …Point 0 …: 1.54560
    Support …Level 1 …: 1.54204
    Support …Level 2 …: 1.54015

  • Report Date 20130620 * USDCAD
    Zone:3 Time:0500 >Price: 1.02903
    Resistance Level 2 …: 1.03030
    Resistance Level 1 …: 1.02960
    Pivot …Point 0 …: 1.02831
    Support …Level 1 …: 1.02761
    Support …Level 2 …: 1.02632

  • Report Date 20130620 * USDCHF
    Zone:3 Time:0500 >Price: 0.92957
    Resistance Level 2 …: 0.93255
    Resistance Level 1 …: 0.93085
    Pivot …Point 0 …: 0.92793
    Support …Level 1 …: 0.92623
    Support …Level 2 …: 0.92331

  • Report Date 20130620 * USDJPY
    Zone:3 Time:0500 >Price: 97.069
    Resistance Level 2 …: 97.521
    Resistance Level 1 …: 97.238
    Pivot …Point 0 …: 96.717
    Support …Level 1 …: 96.434
    Support …Level 2 …: 95.913

gbpusd 20062013 pivots.jpg700×363 20.5 KB

7

A long time ago I used to use pivot points for trading, just trading bounces off the next pivot line if the price cleared a pivot line without a reasonable bounce - it was a scalp only strategy though and required a lot of screen time.

8

the open doesn’t matter at all, just watch price trading at the central pivot,
sometime it opens above and falls below, then short is the direction you should trade.
then you can trade bounces from it, and this goes for all the pivots even tho the central pivot is the most important one giving us the overall direction, you should not blindly enter just because price is below the pivot,
you need some kind of rejection or collaps in price to confirm,
if the market can’t stay above the pivot, then short is the likely direction and vice versa,
then take some of the profit off at S1 or even the midpoint. good luck