Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

fastbrokers

Using Pivot Points to Make Better Trades

Recommended Posts

Using Pivot Points to make Better Trades

 

Pivot Points have been used by floor traders at the major equities and futures exchanges for a long time. Traders found that the price tended to hover near the pivot level and trade in between the pivot and support and resistance levels generated by a simple calculation based on the previous day’s high low and close. One advantage of using Pivots is they are a predictive indicator as opposed to lagging.

 

Predictive Vs Lagging Indicators

 

The majority of technical indicators most traders use such as moving averages and RSI are lagging. Meaning they are telling us what has already happened, or at best, what is happening in real time. Few indicators are predictive; one type of predictive indicator is Pivot Point study. Pivot Points use old data to predict future price movement, and, since technical analysis is based on the idea that many people looking at the same thing will draw similar conclusions, we can use pivot points in a variety of ways to improve our trading. Pivots have been used by floor traders for many years, traders found that daily price action seemed to fluctuate more intensely around certain levels based on the previous day’s high, low and close. Traders also found that by using the pivot point and the previous day’s range, high and low, they could set support and resistance levels that price respected. There are several methods of calculation for these pivots we will explore the classic calculation method in this article in detail but we will also discuss the alternative methods.

 

Classic Pivot Points

 

To calculate the pivot point, take the previous day or session’s high(H), low(L) and close©, add them together and divide by 3 [(H+L+C/3 = Pivot Point (PP)] Now we can calculate the support and resistance levels based off of the pivot, Support 1 is (PP x 2)-H , Resistance 1 is (PP x 2) – L =, S2 is (PP-Range), S3 is(PP-Range) x 2 and S4 is (PP-Range) x 3. R2 is (PP+Range), R3 is (PP+Range x 2) and R4 is (PP+Range x 3). Range is High-Low.

 

E-mini S&P500 Chart:

attachment.php?attachmentid=29187&stc=1&d=1338410023

 

For this example we will use the E-mini S&P 500 futures. The previous session high was 1124.25, the low was 1110.25 and the close was 1122.25

 

Using these values we can calculate the pivot point, which is 1118.92, Support1= 1113.57, Resistance1=1127.58, S2=1104.94, S3=1090.92 and S4=10796.92. R2=1132.92, R3=1146.92 and R4=1160.92.

Looking at this chart, we see that when price fell, it fell exactly to the first level of support and bounced higher. We used the exchange hours to set our session and ignored the Globex/overnight session when calculcating our pivot points. The reason we did this is because much more volume is traded during the exchange session and the institutions that really move the price are trading during these hours. Most institutions do not trade the low liquidity overnight session unless there is a news event. So when the market opened the next day it immediately fell and found support exactly at S1. The difference between R1 and S1 was about 14 points, which is a pretty large range for this contract. In other words, it would take a major event to push the price to the next level of support or resistance (S2, R2). By using S1 as the buy entry and our pivot point as a take profit level we can use S2 as the Stop Loss level, the difference between S1 and the PP was 5.34 (5.25 rounded down, which is 21 ticks on this contract), so that was our profit potential on this setup. Conversely, we could have set a buy stop slightly higher than R1 and a sell stop right below S1, this would be more of a breakout strategy where we look for the price to move through either level with momentum and continue down to S2 or move higher to R2.

 

Alternate Calculation Methods

 

There are several methods to calculate pivot points, 2 alternate methods are Woodie’s and Fibonacci. For Woodie’s method instead of using the previous session’s closing price, we use the current session’s open price. The formula to calculate the pivot point is PP=(H+L+(Today’s Openx2)/4. Our Support and Resistance levels are calculated the same way as the classic method. Another method is Fibonacci, this method uses the Classic calculation to find the Pivot Point (H+L+C)/3 but uses the major fibonacci levels to calculate support and resistance levels. S1=PP-0.382 x (H-L), S2=PP-0.618 x (H-L) and S3=PP-1.0 x (H-L). R1=PP+0.382 x (H-L), R2=PP+0.618 x (H-L) and R3=PP+1.0 x (H-L)

 

Here is a table using the same Open, High , Low and Close data to compare the different calculation methods:

attachment.php?attachmentid=29188&stc=1&d=1338410023

 

Combining Pivots with other tools.

 

Pivot Points are a valuable tool for any trader, however, no single tool tells the whole story, we are looking for multiple indicators to align and confirm a move. Meaning, if the price is nearing R1, our RSI is above 90 and we have an important Fibonnacci level at or around the same price, that validates our prediction that we will encounter resistance more than relying on any 1 indicator. It is important to look at different indicators that tell a different story. For example if you are using a moving average crossover for entry confirmed by a MACD, you are basically looking at the same thing in two different ways, a MACD measures the difference between 2 moving averages so of course the signal will be confirmed! But if we mix the inidcators up by using a momentum indicator such as RSI or Stochastics, now we are looking at 2 different instruments that are giving a similar reading. Combine these indicators with support and resistance tools such as pivots and Fibonnacci, now you have 3 totally different indicators for confirmation, that means you have a much better chance of making a good trade. You may find yourself taking less trades, however this is about quality, not quanitity. In the end, trading is all about probablilty, and if you put the probability in your favor over and over again, you will increase your chances of coming out on top.

 

 

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

 

Jesse Richards is a Series 3 registered Commodities Futures Broker and a Principal of Fast Trading Services LLC

SP32-20100813-121807.gif.3fd621315abc6f781c0e5c8b50b61176.gif

SP32-20100813-155431.gif.da1e71eafa8035c6ab66ebef93731ec8.gif

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Similar Content

    • By Ninjatrader_Staff
      Trade Nano Bitcoin Futures & Get $100



      New Nano Bitcoin Futures allow traders to easily go long or short Bitcoin with commission-free trading, $25 margins & $0 market data fees. For a limited time, you can earn a $100 cash bonus* when you trade this contract from Coinbase Derivatives. Simply trade 100+ Nano Bitcoin contracts prior to August 31st, 2022 & $100 cash will be credited to your account. It’s that easy.
      OPEN ACCOUNT
      4 Reasons to Trade Nano Bitcoin Futures Contracts

      Significantly less capital required to trade
      Trade commission-free with just $25 day trading margins & $0 market data fees Go long or short Bitcoin
      Easily trade both directions by simply buying or selling contracts based on your market view
      Protect your assets in a regulated environment
      Trade a regulated product in a marketplace regulated by the CFTC to ensure your peace of mind

      Gain exposure to crypto without owning crypto
      Capitalize on market volatility while maintaining the benefits of futures including increased leverage, tax efficiencies, segregated funds & more.


      If you have any questions on how to start trading this exciting new Nano product from Coinbase Derivatives, please contact us at brokeragesales@ninjatrader.com.
      _______________________________________________________________
      *Program Requirements:

      Available for both new and funded individual NinjaTrader accounts. Trade 100 or more Nano Bitcoin contracts (50 round turns) prior to August 31st, 2022 to earn a $100 cash rebate. The cash bonus will be distributed as a $100 credit to each qualifying individual account in September 2022 Credits may be subject to US withholding taxes & any associated taxes are the customer’s responsibility. IRA and professional accounts are not eligible for this offer. Program requirements subject to change.

      RISK DISCLOSURE: Futures, foreign currency and options trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. View Full Risk Disclosure.
    • By Ninjatrader_Staff
      Nano Bitcoin futures are crypto futures priced right for all traders with $25 day trading margins, no market data fees and commission-free trading!
      Sized at just 1/100th of a Bitcoin, Nano Bitcoin futures from Coinbase Derivatives allow traders to navigate volatile markets with a contract size that fits any portfolio. Open your NinjaTrader account today & easily go long or short to hedge against Bitcoin price moves in a regulated marketplace.
      OPEN ACCOUNT
      4 Reasons to Trade Nano Bitcoin Futures Contracts
      Significantly less capital required to trade Trade commission-free with just $25 day trading margins & $0 market data fees Go long or short Bitcoin Easily trade both directions by simply buying or selling contracts based on your market view Protect your assets in a regulated environment Trade a regulated product in a marketplace regulated by the CFTC to ensure your peace of mind Gain exposure to crypto without owning crypto Capitalize on market volatility while maintaining the benefits of futures including increased leverage, tax efficiencies, segregated funds & more.
      If you have any questions on how to start trading this exciting new Nano product from Coinbase Derivatives, please contact us at brokeragesales@ninjatrader.com.
      Futures, foreign currency and options trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. View Full Risk Disclosure.
    • By Ninjatrader_Staff
      Save on a Lifetime License!
      Open a new NinjaTrader Brokerage account by June 30th and save $100 on a new Lifetime license at a discounted price of only $999.
      OPEN ACCOUNT
      Along with access to the most powerful version of NinjaTrader, you will save even more with deep discount commissions at $.09 per Micro futures contract & only $50 margins.
      Your Lifetime license includes ALL of NinjaTrader’s premium features:
      Award-winning order entry options including Chart Trader & OCO orders
      Order Flow + tool set featuring the Volume Profile Indicator – NinjaTrader’s most powerful indicator to date
      ATM Strategies, advanced Alerting system, auto-close positions for additional risk management and more
      PLUS all future NinjaTrader platform enhancements are included at no additional charge – for life!
      Simply fund your account to lock in your savings. Once you have funded your new account, you will receive a discounted purchase link by email.
       
      Questions?
      Contact us at 312.262.1289 or brokeragesales@ninjatrader.com.
      *Platform License Discount Requirements:
      Account must be opened & funded in June 2022
      Discount is applicable to software purchase only
      2nd accounts for current NinjaTrader Brokerage account owners not eligible for platform discounts
      Futures and Forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. View Full Risk Disclosure.
    • By TopAlgo
      Youtube, NT8 Auto Spreader
       
    • By Ninjatrader_Staff
      Open a new futures brokerage account by February 28th with a NinjaTrader Lifetime license & receive:
      Commission-Free Micro trading in March $50 margins on Micros Access to the most powerful version of NinjaTrader Free platform upgrades for life!
      Simply open & fund your new account in February & purchase a Lifetime license. You will then receive a rebate for commissions on all Micro futures trades placed from March 1st – March 31st.*
      Open Futures Account
      A NinjaTrader Lifetime license provide access to all premium features including Chart Trader, OCO orders, Order Flow +, and more.
      * Program Requirements:
      Account must be funded by February 28th, 2022 with $400 minimum A new NinjaTrader Lifetime license ($1099) must be purchased by February 28th, 2022 Standard exchange, NFA and routing fees still apply A commission rebate will be applied to the account holder’s balance for all March Micro trades 2nd accounts for current NinjaTrader Brokerage account owners not eligible for rebates
      Futures and Forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing one's financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. View Full Risk Disclosure.
  • Topics

  • Posts

    • Date: 11th July 2025.   Demand For Gold Rises As Trump Announces Tariffs!   Gold prices rose significantly throughout the week as investors took advantage of the 2.50% lower entry level. Investors also return to the safe-haven asset as the US trade policy continues to escalate. As a result, investors are taking a more dovish tone. The ‘risk-off’ appetite is also something which can be seen within the stock market. The NASDAQ on Thursday took a 0.90% dive within only 30 minutes.   Trade Tensions Escalate President Trump has been teasing with new tariffs throughout the week. However, the tariffs were confirmed on Thursday. A 35% tariff on Canadian imports starting August 1st, along with 50% tariffs on copper and goods from Brazil. Some experts are advising that Brazil has been specifically targeted due to its association with the BRICS.   However, the President has not directly associated the tariffs with BRICS yet. According to President Trump, Brazil is targeting US technology companies and carrying out a ‘witch hunt’against former Brazilian President Jair Bolsonaro, a close ally who is currently facing prosecution for allegedly attempting to overturn the 2022 Brazilian election.   Although Brazil is one of the largest and fastest-growing economies in the Americas, it is not the main concern for investors. Investors are more concerned about Tariffs on Canada. The White House said it will impose a 35% tariff on Canadian imports, effective August 1st, raised from the earlier 25% rate. This covers most goods, with exceptions under USMCA and exemptions for Canadian companies producing within the US.   It is also vital for investors to note that Canada is among the US;’s top 3 trading partners. The increase was justified by Trump citing issues like the trade deficit, Canada’s handling of fentanyl trafficking, and perceived unfair trade practices.   The President is also threatening new measures against the EU. These moves caused US and European stock futures to fall nearly 1%, while the Dollar rose and commodity prices saw small gains. However, the main benefactor was Silver and Gold, which are the two best-performing metals of the day.   How Will The Fed Impact Gold? The FOMC indicated that the number of members warming up to the idea of interest rate cuts is increasing. If the Fed takes a dovish tone, the price of Gold may further rise. In the meantime, the President pushing for a 3% rate cut sparked talk of a more dovish Fed nominee next year and raised worries about future inflation.   Meanwhile, jobless claims dropped for the fourth straight week, coming in better than expected and supporting the view that the labour market remains strong after last week’s solid payroll report. Markets still expect two rate cuts this year, but rate futures show most investors see no change at the next Fed meeting. Gold is expected to finish the week mostly flat.       Gold 15-Minute Chart     If the price of Gold increases above $3,337.50, buy signals are likely to materialise again. However, the price is currently retracing, meaning traders are likely to wait for regained momentum before entering further buy trades. According to HSBC, they expect an average price of $3,215 in 2025 (up from $3,015) and $3,125 in 2026, with projections showing a volatile range between $3,100 and $3,600   Key Takeaway Points: Gold Rises on Safe-Haven Demand. Gold gained as investors reacted to rising trade tensions and market volatility. Canada Tariffs Spark Concern. A 35% tariff on Canadian imports drew attention due to Canada’s key trade role. Fed Dovish Shift Supports Gold. Growing expectations of rate cuts and Trump’s push for a 3% cut boosted the gold outlook. Gold Eyes Breakout Above $3,337.5. Price is consolidating; a move above $3,337.50 could trigger new buy signals. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Michalis Efthymiou HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Back in the early 2000s, Netflix mailed DVDs to subscribers.   It wasn’t sexy—but it was smart. No late fees. No driving to Blockbuster.   People subscribed because they were lazy. Investors bought the stock because they realized everyone else is lazy too.   Those who saw the future in that red envelope? They could’ve caught a 10,000%+ move.   Another story…   Back in the mid-2000s, Amazon launched Prime.   It wasn’t flashy—but it was fast.   Free two-day shipping. No minimums. No hassle.   People subscribed because they were impatient. Investors bought the stock because they realized everyone hates waiting.   Those who saw the future in that speedy little yellow button? They could’ve caught another 10,000%+ move.   Finally…   Back in 2011, Bitcoin was trading under $10.   It wasn’t regulated—but it worked.   No bank. No middleman. Just wallet to wallet.   People used it to send money. Investors bought it because they saw the potential.   Those who saw something glimmering in that strange orange coin? They could’ve caught a 100,000%+ move.   The people who made those calls weren’t fortune tellers. They just noticed something simple before others did.   A better way. A quiet shift. A small edge. An asymmetric bet.   The red envelope fixed late fees. The yellow button fixed waiting. The orange coin gave billions a choice.   Of course, these types of gains are rare. And they happen only once in a blue moon. That’s exactly why it’s important to notice when the conditions start to look familiar.   Not after the move. Not once it's on CNBC. But in the quiet build-up— before the surface breaks.   Enter the Blue Button Please read more here: https://altucherconfidential.com/posts/netflix-amazon-bitcoin-blue  Profits from free accurate cryptos signals: https://www.predictmag.com/ 
    • What These Attacks Look Like There are several ways you could get hacked. And the threats compound by the day.   Here’s a quick rundown:   Phishing: Fake emails from your “bank.” Click the link, give your password—game over.   Ransomware: Malware that locks your files and demands crypto. Pay up, or it’s gone.   DDoS: Overwhelm a website with traffic until it crashes. Like 10,000 bots blocking the door. Often used by nations.   Man-in-the-Middle: Hackers intercept your messages on public WiFi and read or change them.   Social Engineering: Hackers pose as IT or drop infected USB drives labeled “Payroll.”   You don’t need to be “important” to be a target.   You just need to be online.   What You Can Do (Without Buying a Bunker) You don’t have to be tech-savvy.   You just need to stop being low-hanging fruit.   Here’s how:   Use a YubiKey (physical passkey device) or Authenticator app – Ditch text message 2FA. SIM swaps are real. Hackers often have people on the inside at telecom companies.   Use a password manager (with Yubikey) – One unique password per account. Stop using your dog’s name.   Update your devices – Those annoying updates patch real security holes. Use them.   Back up your files – If ransomware hits, you don’t want your important documents held hostage.   Avoid public WiFi for sensitive stuff – Or use a VPN.   Think before you click – Emails that feel “urgent” are often fake. Go to the websites manually for confirmation.   Consider Starlink in case the internet goes down – I think it’s time for me to make the leap. Don’t Panic. Prepare. (Then Invest.)   I spent an hour in that basement bar reading about cyberattacks—and watching real-world systems fall apart like dominos.   The internet going down used to be an inconvenience. Now, it’s a warning.   Cyberwar isn’t coming. It’s here.   And the next time your internet goes out, it might not just be your router.   Don’t panic. Prepare.   And maybe keep a backup plan in your back pocket. Like a local basement bar with good bourbon—and working WiFi.   As usual, we’re on the lookout for more opportunities in cybersecurity. Stay tuned.   Author: Chris Campbell (AltucherConfidential) Profits from free accurate cryptos signals: https://www.predictmag.com/   
    • DUMBSHELL:  re the automation of corruption ---  200,000 "Science Papers" in academic journal database PubMed may have been AI-generated with errors, hallucinations and false sourcing 
    • Does any crypto exchanges get banned in your country? How's about other as Bybit, Kraken, MEXC, OKX?
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.