Identifies key price levels for entries, exits, and reversals
| Strategy Type | Support and Resistance Based Trading |
| Market Outlook | Identifies key price levels for entries, exits, and reversals |
| Risk Profile | Low to Moderate - Predefined levels with clear stop placement |
| Reward Profile | 1:1.5 to 1:3 targeting pivot level to pivot level moves |
| Time Horizon | Intraday to Swing trading (1-5 days) |
| Capital Requirement | A$25,000 - A$150,000 for meaningful exposure |
| Margin Type | Cash/CHESS for holdings; Margin loan for intraday leverage; Derivatives margin for ETOs/LEPOs |
| Best Used When | CBA respecting calculated pivot levels with clear price reactions |
| Asx Applicability | CBA ideal for pivot points due to deep institutional ownership (super funds, index trackers) creating reliable level respect; The single most liquid stock on the ASX ensures clean reactions at pivots; Banking bellwether and largest S&P/ASX 200 constituent (~10% index weight) with predictable support/resistance behaviour |
| Asic Compliance | Fully compliant standard technical analysis strategy under ASIC market integrity rules; No personal advice provided |
| Contract Sizes | 100 shares per contract (~A$16,000 contract value at A$160); American-style, physically settled • 100 shares per contract; Low Exercise Price Option acts as a single-stock-futures substitute, marked-to-market with margin • No contract restriction; minimum marketable parcel A$500, typically 50-500 shares; T+2 settlement |
| Trading Hours | 10:00 AM - 4:00 PM AEST/AEDT (continuous); Pre-open 7:00-10:00 AM; Closing Single Price Auction ~4:10 PM. Daily pivots calculated from prior session close |
| Expiry Considerations | Equity ETOs follow a monthly expiry cycle (typically the Thursday preceding the last Friday of the contract month); unlike India there are no liquid weekly equity options, so swing pivots use the front-month contract |
| Tax Implications | Active/intraday trading: ordinary income at marginal rates (treated as a share trader). Investor holding >12 months: 50% CGT discount applies. Derivatives (ETOs/LEPOs): generally revenue account for active traders. No Securities Transaction Tax (unlike India); GST applies to brokerage. CBA dividends carry franking credits which offset tax on distributions |
Calculate pivots before market open using the prior session's High, Low, and Close (4:00 PM AEST close). Have all levels ready by 9:45 AM for pre-market planning.
The central Pivot Point (PP) is most important as it determines daily bias. Price above PP = bullish; below PP = bearish. Other levels (S1, R1, etc.) provide specific entry/exit points.
No. Wait for confirmation (reversal candle, volume spike) at pivot levels. Pivot touch is an alert, not an entry signal. Only trade with proper confirmation.
For gaps > 1%, wait 15-30 minutes for price to stabilize. Pivots may be less reliable on large gap days (common after CBA results or RBA decisions). Consider using opening range instead.
Most pivot trades are intraday (exit by 3:45 PM AEST). Level-to-level moves typically complete within 2-4 hours. Swing trades using weekly pivots can be held 2-5 days.
Use VWAP for trend bias (above = bullish, below = bearish) and pivots for entry levels. Best trades: price above VWAP AND bouncing at pivot support. Skip trades when VWAP and pivots conflict.
CPR (Central Pivot Range) is the zone between TC and BC. Narrow CPR (< 0.3%) predicts trending days - trade breakouts. Wide CPR (> 0.8%) predicts range days - trade bounces within CPR.
Standard pivots for most trading (most widely watched). Fibonacci pivots if trading with Fib traders. Camarilla for scalping. Use confluence when multiple types align at same level.
Weekly pivots provide major S/R context; daily pivots give precise entry/exit. Daily S1 at Weekly PP = very strong support. Trade daily signals within weekly framework.
Candle CLOSE beyond level (not just wick), above-average volume, and ideally follow-through in next candle. Morning breakouts are more reliable than afternoon.
Virgin CPR is prior day's CPR that was never touched. When price eventually reaches it, expect strong reaction. Trade aggressively at Virgin CPR with tight stops.
Rising PP each day confirms uptrend - buy pullbacks to PP. Falling PP confirms downtrend - sell rallies to PP. Track PP direction over 3-5 days for trend confirmation.
After breakout above R1, calculate Fib extensions from S1-R1 swing. 161.8% often lands near R2 creating confluence target. Use for extended target setting.
Target 55-65% win rate, Profit Factor > 1.5, R:R > 1.3:1. Track performance by pivot level - S1 bounces often best. VWAP confluence should improve metrics significantly.
Allocate 25-30% to pivot strategies. Maximum 20% in single stock. Trade pivots across 3-5 liquid ASX 200 stocks, avoiding stacking correlated big-four bank positions. Track metrics by level and time of day for optimization.
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