Day Trading with Pivot Points Strategy Explained. // Intraday tutorial indicator high low basics 101


Day Trading with Pivot Points Strategy Explained. // Intraday tutorial indicator high low basics 101 pivots how to trade with pivot points rules basics for beginners david moadel welcome to looking at the markets with David Modell today we’re going to talk about intra day trading using pivot points so let’s talk about that you can use the previous day’s high low and close to calculate a pivot point for the current trading day just add the previous day’s high low and close and then divide by three that’s the pivot point and you can use it as the primary support or resistance level for the trading day after you have calculated the pivot point for the day and you can do that before the market opens in the morning next you can calculate more support and resistance points for that day you can calculate two more support points and two more resistance points with some basic formulas and actually I’ve seen people calculate three more support points and three more resistance points but we’re going to keep it simple with just two of each instead of three so let’s look at the formulas okay so before the beginning of the trading day what you’re going to do is first you’re going to calculate P the pivot point and we talked about that it’s just an average okay you’re going to average take the average of the previous day’s high price low of the day and closing price all right the high of the day the low of the day and the close of the day for the previous trading day you take the average so you add those three numbers up and then after that you divide by three that’s the pivot point that is your main or primary support and resistance for the day after that you take that number and you’re going to make some more calculations first you’re going to calculate support 1s1 so you take that number that pivot point number multiplied by two and then you take that number and you subtract the high and that’s the high of the previous trading day then to get support to or s2 you take that pivot point okay well first remember you want to do what’s in parentheses first so you take the previous day’s high price and low price subtract okay and then subtract that number from the pivot point that you’ve got earlier now you want to get your resistance one and resistance too so to get r1 resistance one you take the pivot point that you calculated earlier multiply by two and then take that number and subtract the low price of the previous trading day and then finally to get r2 and that’s your second resistance resistance to you take well you want to do what’s in parentheses first so take the high minus the low of the previous trading day okay and then add that number to P the pivot point that you calculated earlier I know that seems like a lot of work but that’s how you do it and here’s what it looks like all right this is just an example now here’s the beginning of the trading day okay and these are all 5-minute candles because this method is for day trading and notice that once the trading day starts that the support and resistance levels they all change in this case they all shifted downwards based on the previous day’s high low and closing prices so every day they’re going to change alright so this line here in the middle that’s P the pivot point and you’ve got your resistance one a little bit above the pivot and then resistance 2 a little bit higher and you’ve got your support one a little bit below the pivot and support too even lower than that all right and it’s these numbers are only good for that trading day until 4 o’clock p.m. Eastern Time all right and then the next day all these lions might shift upward or downward depending on the new calculations for the new trading day these pivot points must be recalculated for each new trading day using the previous day’s high low and closing numbers now to make it easier you can Google pivot point calculator to find online tools to do the calculations for you so perhaps every morning or you could even do it in the evening use the previous you know the night before for example you can just Google pivot point calculator and find a reliable pivot point calculator type in the numbers the previous trading day is high low and close and usually it will calculate it for you now please note that this method is not perfect and you must use your own judgment when executing any trade alright so this video is not a recommendation to use any method or to buy or sell anything you have to use your own judgment now if the current price okay so how do you use this during the trading day once you’ve calculated all the numbers well if the current price or the current candlestick if you’re on the five-minute chart if the current price breaks above P the pivot with conviction that could be a buy signal so that’s bullish you could set your initial profit target at r1 and your stop-loss at s1 now what if it keeps going up above r1 though okay well if it keeps going up fast and breaks above r1 with conviction and the conviction means it’s going up fast alright and also you want to look at the volume if there’s plenty of volume behind that up move that’s even better that’s more conviction so if it keeps going up fast and if it breaks above r1 with conviction you could set r2 as your profit target and your stop-loss at P the pivot point now what about bearish bearish signals well if the current price or the current candlestick on the 5-minute chart breaks below P the pivot with conviction again if it’s going down fast and also the volume is is there that could be a short signal you could set your initial profit target at s1 and your stop-loss at r1 now what if it keeps going down even faster well if it keeps going down fast and breaks below s1 with conviction you could set s2 as your profit target and your stop-loss and P the pivot point so let’s see what that looks like we’re back at this chart again so if the price broke above P the pivot with conviction then you could set r1 the first resistance line as your profit target and you can set s1 the first support line as your stop loss all right now if it goes up to r1 and just starts to go sideways or starts to turn around and go down a little bit you can take profits but what if it just keeps shooting up and there’s plenty of volume and it’s just a big green candle above r1 well you don’t have to take profits there why not let your winners run and now you can make r2 as your profit target and r1 I’m sorry I apologize P P is now your stop-loss okay so it’s gone way above r1 with conviction so now P is your stop-loss and r2 is your profit target and if it gets up to r2 you can take profits now some people put an r3 on their chart and you can look up the formula for that or use just Google you know you use Google to find an online calculator and if you want to make this more complex you can you can put an r3 and an s3 down here on your chart if you want to or you can keep it simple just using r1 and r2 alright so what if it breaks below P with conviction below the pivot point for the day well you can use s1 is your profit target for your short position and r1 is your stop-loss and if it goes down here and starts to go sideways or go back up you can just take profits what if it shoots below here a big red candle going fast with plenty of volume well you can let your winners run again you can change your profit target to s2 and change your stop-loss to pee the original pivot now some traders prefer to avoid trading during the first half hour of the trading day because it’s so it is so volatile alright it’s kind of unpredictable and that’s what some people do however some pivot point traders feel that the pivot points are more reliable at the beginning of the trading day and become less reliable towards the end of the day so that’s something for you to think about as to whether you want to use these pivot points in the first half hour of the trading day some people feel that these signals are more reliable toward the beginning of the day and become less reliable as the day progresses so I hope this was a helpful introduction to you for pivot point trading please give this video a thumbs up on YouTube and leave comments and please subscribe to my youtube channel so you can receive the latest updates on my financial educational videos and if you want to contact me because you might have questions about trading investing using indicators such as this one we’re putting together a trading or investing plan because you really need to have one you can email me anytime my email address is David Modell at gmail.com thank you so much for watching and listening and I’ll talk to you again soon different now

36 thoughts on “Day Trading with Pivot Points Strategy Explained. // Intraday tutorial indicator high low basics 101”

  1. I used this Pivot Point a lot in my TA with volume. I like to detect trend switch and break up / down in 1 hour chart trading. Happy trading 🙂

  2. sometime, next day matkeet start down / up side pivot point then what we should? and this strategy will relible in h1

  3. with regard to forex should 'trading day' be individual session? or sessions combined?
    thank you for the information David, like too many I kept seeing Pivot and passing it by, time to add to analysis
    also have been utilizing 1.618 retracement's off previous moves to calculate trade entry/exit, its not always perfect but proving effective with certain scalp setups

  4. Another excellent video David. Do you utilise any other indicators (apart from Pivot Points) to decide when to open a trade. Thanks, mike

  5. Well done again…this gives me a great idea about what OTHERS might be doing..with volume i can see how this would be very beneficial in my trading..thank you. Do algos use pivot points because its produces a line that can be drawn..and not some line that is random or made up as the daily price action influences OTHER studies?

  6. Great video and appreciate the formulae. Barchart.com has a "cheat sheet" that pretty much fits your video's objectives.

  7. many pivot calculators also include the open. is the open not included? or just close, high, and low?

  8. Had they used beautiful women on the cover of my school textbooks, I probably would have learned a lot more. Thank you David Moadel for making learning fun again!

  9. It looks like a great strategy for intra day trading. I am very much interested in giving my testimony after trying this winning strategy for a month. God bless you David!

  10. hello greetings!! just a small update hopefully you would agree sir..in my journey of life i still have to come across some one who can have a better way of explaining things than you do..hats off to you, god bless you always!!regards..

  11. Mehn… Your analysis about calculating the pivot point is the best I, have ever cone across, thanks a million, with your analysis… Now I understand how to calculate pivot points, on daily, weekly and monthly candles… I prefer calculating in larger timeframes… And entering tradeds in smaller timeframes like 15 and 30 minutes… Thanks ones more and God Almighty replenish your knowledge and understanding in chart analysis.

  12. You're just the best Mr David, as your name implies, you're a model for teaching, I off my hart, thanks.

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