Pivot Point Trading

You need the prior session's High, Low, and Close prices. For daily pivots, use yesterday's data. For weekly pivots, use last week's data. Most charting platforms provide this automatically.

Start with Standard pivots - they're the most widely used and understood. Once comfortable, experiment with Fibonacci or Camarilla pivots to see what suits your trading style.

Pivot points work best on liquid stocks with high volume. On TSX, focus on big banks (RY, TD, BMO), energy majors (ENB, SU), and XIU ETF. Illiquid small-caps may not respect pivots as well.

Watch for confirmation: reversal candlestick patterns suggest bounce; strong volume through the level suggests breakout. Also consider bias (price above/below PP) and how many times the level has been tested.

Yes! Use weekly or monthly pivots for swing trades. These longer-term pivots identify major support/resistance levels that can guide multi-day positions.

Use Standard pivots as primary reference. When different calculations conflict, look for levels where multiple methods agree (confluence). Reduce position size when pivots disagree significantly.

First touches have higher bounce probability. However, wait for confirmation (candlestick pattern, volume). Second and third touches are weaker but can still be traded with reduced size.

In uptrends, focus on buying at pivot supports (S1, PP). In downtrends, focus on selling at pivot resistances (R1, PP). Trading with the trend at pivot levels is higher probability than counter-trend.

Gaps often fill. If price gaps above R1, watch for retest of R1 (now support). If gap doesn't fill by midday, pivot structure may need adjustment. Don't blindly trade gapped pivots.

Very important. High volume at a pivot confirms significant interest and increases reliability. Low volume reactions are suspect. Use relative volume (vs 20-day average) to assess significance.

Use daily OHLC data to calculate historical pivots. Apply your rules systematically with no look-ahead bias. Track hit rates, bounce rates, and trade metrics. Test across different volatility regimes and market conditions.

Yes. Buy calls/puts at pivot support/resistance for directional plays. Sell iron condors when expecting price to stay between S1 and R1. Use pivots to set strike prices for defined-risk options trades.

Pre-market, note where price is relative to calculated pivots. If gap is large (>1%), wait for first hour to establish which levels are relevant. Sometimes prior pivots become irrelevant after major gaps.

Some traders use Camarilla for ranging markets (tighter levels) and Standard/Fibonacci for trending markets. Alternatively, stick with one method but adjust position sizing and targets based on volatility.

Use Python with broker API (IBKR) for full automation. TradingView Pine Script for alerts. Define rules precisely: entry zones, confirmation patterns, position sizing, exits. Start with alerts before fully automating execution.