Pivot Point Reversal

Calculate pivot points before the market opens using the previous day's (or week's for weekly pivots) High, Low, and Close. For FTSE, calculate after 4:30 PM close or before 8:00 AM open. Most charting platforms calculate these automatically.

Start with Classic (Floor) pivots. They're the most widely used and have balanced level spacing. Once comfortable, experiment with Fibonacci (wider) or Camarilla (tighter) to see which suits your instruments and trading style.

No! Wait for confirmation - a reversal candle pattern (hammer, engulfing) or oscillator extreme (RSI < 30 at support). Price can easily slice through pivots without bouncing. Confirmation filters out weak setups.

The safest target is the Central Pivot (PP) for trades from S1/R1. From S2/R2, you can target S1/R1 or PP. The next pivot level in your direction is always a logical target. More aggressive traders target two levels away.

You don't know for certain - that's why we use stops. However, confluence (multiple timeframe pivots at same level), trend alignment (with-trend trades), and confirmation signals all increase the probability of a pivot holding.

Calculate both daily and weekly pivots. When a daily pivot (like S1) is near a weekly pivot (like weekly PP), you have confluence - a stronger level. Trade these confluence zones with more confidence and potentially larger size.

Camarilla pivots are tighter (closer together) because they use smaller multipliers. You get more touches but smaller bounces. Classic pivots are wider, fewer touches but more significant when reached. Use Camarilla in low volatility, Classic normally.

Generally avoid it. Buying at S1 in a downtrend is catching a falling knife. Either trade only with-trend pivots (buy support in uptrends) or accept lower win rates for counter-trend trades with tighter stops.

Large gaps often break multiple pivot levels. On gap days, wait to see if the gap fills or extends. If extending, trade pivot breakouts. If filling, the gap fill target may override pivot targets. Gap days are often trending days - favor breakouts.

Yes! Weekly and monthly pivots are excellent for swing trading. They're stronger and hold more reliably than daily pivots. A trade off weekly S2 might target weekly PP over several days. Use daily pivots for entry timing within the weekly level.

In high volatility, use wider pivot types (Fibonacci) and focus on S2/R2 and S3/R3 as S1/R1 get easily breached. In low volatility, use Camarilla for tighter levels. Alternatively, ATR-scale standard pivot distances. Track VFTSE to identify regime.

Credit spreads work well - sell put spread at support pivots (bull put spread) or call spread at resistance (bear call spread). Short strike at the pivot level you expect to hold. This profits from both direction and time decay if pivot holds.

Calculate pivots using only prior period data (no look-ahead). Test multiple pivot types. Include confirmation requirements. Test across regimes (ranging vs trending). Use walk-forward validation. Track by level (S1 vs S2) to identify which are most reliable.

Morning scan: Calculate pivots for universe, identify instruments near levels. Score setups (confluence, confirmation, trend). Rank and allocate capital to top setups. Manage concurrent positions and sector exposure. Track performance by level and instrument.

When price breaks through a pivot you expected to hold (stopping you out), this often signals momentum. The failed support becomes resistance. Reverse your position to trade in the breakout direction, using the broken pivot as your stop. Failed breakouts work similarly in reverse.