Pivot Point Reversal

Pivot points reset each trading period. Daily pivots are calculated fresh each day using the previous day's H/L/C. Weekly pivots reset each week, monthly each month. You need to recalculate at the start of each period.

Start with Standard (Floor Trader) pivots as they're most widely used. For intraday scalping, try Camarilla pivots (tighter levels). For Fibonacci traders, use Fibonacci pivots. Most platforms offer multiple types.

Look for: 1) Reversal candle pattern at the pivot, 2) Confluence with other support/resistance, 3) Normal or low volume (high volume may break through), 4) Price action showing rejection. No guarantee, but these increase probability.

The standard target is the next pivot level toward the center. For a buy at S1, target PP. For a buy at S2, target S1 or PP. You can also use partial exits at each level.

Pivot points are forward-looking indicators. You calculate them from the previous complete session to provide today's expected support/resistance levels. Today's data isn't complete until market close.

CPR consists of the Central Pivot (PP) plus Top Central (TC) and Bottom Central (BC). It creates a zone around PP. Wide CPR suggests range-bound day; Narrow CPR suggests breakout potential.

Plot weekly (major) and daily (trading) pivots together. Look for confluence where daily pivots align with weekly pivots. These confluence zones are stronger support/resistance and higher probability trades.

Pivot migration is the direction PP moves day-over-day. Rising PP = bullish trend; Falling PP = bearish trend; Stable PP = ranging. Trade with the migration direction for higher probability.

A Virgin CPR is one that was never touched in the previous session. These unfilled CPRs act as magnets that price is likely to visit. Look for price to test virgin CPRs.

In trends, pivots still work but differently: Buy at support pivots in uptrends (with trend), avoid shorting resistance (will likely break). Use pivots for entry timing with trend, not counter-trend fades.

Camarilla uses Close ± (Range × multiplier). R3 = C + (H-L)×1.1/4, R2 = C + (H-L)×1.1/6, R1 = C + (H-L)×1.1/12. Similar for S1-S4. Creates 8 levels total, tighter than standard.

DeMark adjusts based on close vs open: If C<O: X=H+2L+C. If C>O: X=2H+L+C. If C=O: X=H+L+2C. PP=X/4. Only one R1 and S1 calculated. Adapts to previous session character.

Pivot width (R1-S1) reflects expected volatility. Wide width = larger expected moves = can use standard or larger targets. Narrow width = smaller moves = tighter targets or skip. Adjust stops proportionally.

Pivot-friendly: Overlapping CPRs, ADX < 25, price oscillates around PP. Pivot-unfriendly: Non-overlapping CPRs (gap), ADX > 30, price sustained above/below PP. Adapt strategy accordingly.

Sell puts at S2 for bull put spreads if support expected to hold. Sell calls at R2 for bear call spreads. Iron condors with short strikes at S2 and R2 profit if price stays in normal range.