Hi,
if im going to trade in the 30 min timeframe, and want to use pivot point indicator.
how will i calculate it?
should i use the open high low and close of the last 30 min candlestick?
or should i use the open high low and close of the last 1 day candlestick?
It depends really on your trading objectives and what you intend using the pivot for.
As you know, the pivot gives you a weighted average price from a previous period. If I remember rightly you are interested in scalping, or at least, short intraday trades? In which case you may find the most appropriate pivot will be from the 30 min or 1 hour timeframe - or even a 4 hour TF. But if you are looking for longer trades then a daily pivot is most probably better. In these circumstances you would be using the pivot as (part of) your entry method.
But there are other ways to utilise the pivot. For example, I don’t use pivots as my trade entry method but I do always plot a daily pivot even on my 15min chart and then look for entry signals that are facing away from the pivot line and not towards it…why? Because if the market is moving away from yesterday’s weighted average price level then it suggests that it is doing something new, either continuing yesterday’s move or starting a retracement. But if the signal is back towards the pivot then it suggests the market is currently directionless and just moving back to a neutral position. But that is just my method and I look for longer trades than just a few pips scalping. Here is an example from today’s oil chart. The first red circle is a signal back towards the blue pivot line and had no real follow-through. But the second red circle was an entry signal away from the pivot - with the added conviction of having bounced off the pivot level - and that is the one I took.
In this way, the pivot is not being used as an entry method, rather it is acting as a filter helping to select the trades with the greater potential:
yup im intrested in scalping/short intraday trades.
i think using previous 1day pivot point on 15 min chart might be a good idea. If im going to take 2-3 trades a day
It is a good idea to try several options to see which suits you purposes best. But do remember what the pivot actually is and don’t rely on it as some kind of autonomous line with its own powers! Keep in mind the overall context of the market situation e.g. time of day, forthcoming releases, strength and direction of underlying trend, etc.
Hello,
I find pivot points so powerful for daytrading and if it helps I would remind that 82% of time, price is capped in R2-S2 range.
That’s why I use those levels to base my stop loss orders.
