How To Trade Regular Divergence with MACD, RSI, Stochastics
How to Use Pivot Points in Day Trading
1. How to Use Pivot
Points (SR Lines) for
Day Trading
Vivek Rattan
CeTA, MBA
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2. Pivot Points
⇨Provide good reference points at which to enter
or exit.
⇨Gives an indication of the market bias. (Bullish,
Bearish, Neutral).
⇨Can be used to identify future support and
resistance levels.
⇨Are used to identify trading ranges.
⇨Can be used for any time frame.
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5. Advantages of Pivot Point Trading
⇨Provides key inflection points.
⇨Which are used to determine when to enter the
market, place stops and take profits.
⇨Helps minimize risk.
⇨Can predict next day trading ranges.
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6. Terminology
⇨Pivot : is a level at which the current market direction for
the day changes. Market trading above pivot point is seen
as bullish whereas trading below the pivot point is seen as
bearish.
⇨Resistance : is a point where sellers start to outnumber
buyers.
⇨Support : is a point at which lots of buyers tend to enter
the stock.
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12. Pivot Points can be used by :
Range Breakout and
Trend traders.
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13. Range Trading with Pivot Points
SELL, if the price is near resistance
level, & place a stop just above the
resistance.
BUY, if the price is near support
level & place a stop just below the
support.
Fast, easy & effective way to
determine your Risk-Reward ratio.
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35. Conclusion
⇨Think of pivot points as a new weapon in your
trading arsenal.
⇨Use them to :
◉predict the next day's trading range
◉get an idea of entry / exit points
◉know the day's bias
⇨Use pivot points along with other technical
analysis tools such as candlestick, MACD, RSI,
etc.
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