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 | C$5,000 - C$30,000 for meaningful exposure |
| Margin Type | Cash account for overnight holds; margin account for intraday leverage (CIRO margin rules - Canada has no U.S.-style pattern-day-trader rule); options require an approved options-trading account level |
| Best Used When | CGI respecting calculated pivot levels with clear price reactions |
| Tsx Applicability | CGI ideal for pivot points due to heavy institutional ownership creating reliable level respect; S&P/TSX 60 membership ensures consistent liquidity and clean reactions at pivots; Canada's IT-services bellwether (global consulting, systems integration, and outsourcing, ~94,000 employees across 40+ countries) with low beta (~0.6) and orderly, predictable support/resistance behaviour |
| Regulatory Compliance | Standard technical-analysis strategy, fully compliant. Canadian equities trade on the TSX (TMX Group); listed options and share futures trade on the Bourse de Montreal and clear through the CDCC. Market conduct is overseen by CIRO (Canadian Investment Regulatory Organization, the national self-regulatory organization), with securities regulation administered provincially (e.g., OSC in Ontario, AMF in Quebec) and coordinated by the Canadian Securities Administrators (CSA) |
| Lot Sizes | 100 shares per contract (Bourse de Montreal / CDCC standard); premium quoted per share, contract cost = premium x 100; standard monthly expiries (third Friday); single-stock weekly options are limited in Canada - verify the live chain • Share Futures are listed on the Bourse de Montreal (250-contract position limit, CDCC-cleared) but carry minimal liquidity for individual names - unlike India's deep stock-futures market, single-stock futures are not a practical retail instrument in Canada; use cash equity and listed options instead • No lot restriction; standard board lot is 100 shares, odd lots tradeable |
| Trading Hours | 9:30 AM - 4:00 PM ET (TSX regular session); daily pivots calculated from the prior session's OHLC |
| Expiry Considerations | Monthly option expiry (third Friday) is the key dated event; single-stock weekly options are limited, so most options pivot trades use the nearest monthly contract |
| Tax Implications | Active/frequent trading is generally taxed as business income (100% of profit taxable at marginal rates) under CRA's trader-vs-investor tests (IT-479R factors: frequency, holding period, time and knowledge); infrequent investing is a capital gain (50% inclusion rate in 2026 - the proposed 66.67% increase was cancelled in March 2025). No securities transaction tax (no STT/CTT equivalent). Day-trading inside a TFSA can be deemed carrying on a business and the TFSA taxed; the superficial-loss rule (30 days) disallows quick loss harvesting |
Calculate pivots before market open using prior day's High, Low, and Close (4:00 PM ET TSX close). Have all levels ready by 9:15 AM ET 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. Consider using opening range instead.
Most pivot trades are intraday (exit by 3:45 PM ET). 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 stocks. Track metrics by level and time of day for optimization.
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