Pivot Point Trading

Start with Standard (Floor Trader) pivots - they're the most widely used and watched. As you gain experience, you can experiment with Woodie, Camarilla, or Fibonacci pivots to see which fits your style.

For intraday trading, use daily pivots (calculated from prior day's RTH session). For swing trading, add weekly pivots. Monthly pivots are useful for major S/R context. Most traders start with daily pivots.

Start with RTH (Regular Trading Hours) data. For SXF, that's 9:30 AM - 4:15 PM ET. RTH pivots are cleaner and more widely watched. Some traders use 24-hour pivots, but they can differ significantly.

Focus on the central pivot (PP) and first support/resistance (S1, R1). Add S2 and R2 for extended targets. S3/R3 are rarely reached. Don't overwhelm your charts with too many levels.

Pivots work best on liquid instruments where many traders watch the same levels. For Canadian markets: SXF, CGB futures and large-cap TSX stocks work well. Less effective on illiquid or thinly traded instruments.

When price breaks above (or below) the central pivot, wait for the break to be confirmed (clean close beyond). Then buy (or sell) the pullback to the pivot, which should now act as support (or resistance). Stop on the other side; target R1 (or S1).

CPR is the range between Top Central (TC) and Bottom Central (BC) pivots around the main PP. Narrow CPR suggests prior consolidation (expect expansion). Wide CPR suggests prior volatility (expect contraction). Virgin (untested) CPR often gets tested.

Use weekly pivot to determine directional bias. Trade daily pivots in the direction of weekly bias. For example, if above weekly pivot (bullish), only take long setups at daily support pivots. Use weekly pivots as major targets.

If a pivot breaks, it flips from support to resistance (or vice versa). Wait for a retest of the broken level and trade in the break direction. The next pivot becomes your target. Accept that some levels break - use stops.

Compare pivot levels to other technical levels: VWAP, moving averages (20, 50, 200), Fibonacci retracements, volume profile POC/VAH/VAL. When a pivot aligns with another level, it's confluence - stronger S/R with higher probability.

Trend day: price stays above or below pivot all day, breaks through multiple levels. Range day: oscillates around pivot, bounces at S1/R1 repeatedly. Breakout day: consolidates at a pivot, then breaks with volume to outer pivots. Identify early and adjust strategy.

Watch delta at pivot tests. Positive delta at support = buyers defending (bounce likely). Negative delta at resistance = sellers defending. Absorption at pivot = strong level. Imbalances through pivot = real breakout. Order flow confirms or denies pivot significance.

When a pivot is tested multiple times without breaking, it's exhausting. Each test weakens it. The third or fourth test often breaks through. Watch for increasing volume on later tests. Prepare for breakout rather than bounce on exhausted pivots.

Define: 1) Bias determination (above/below pivot), 2) Setup (which pivots to trade), 3) Confirmation required (candle pattern, order flow), 4) Entry rules, 5) Stop placement (beyond pivot + buffer), 6) Target (next pivot). Backtest and track performance.

Above pivot = bullish, prefer calls/bull spreads. Below = prefer puts/bear spreads. Use pivot levels as strike selection guides. Iron condors work on range days with wings at S1/R1. Pivots act as pin levels on expiration days.