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 | £2,000 - £20,000 for meaningful exposure (cash shares, CFD margin, or option premium) |
| Margin Type | Full payment for cash equity (T+2); margin via CFD or spread bet for leveraged intraday/swing; single-stock options margined by ICE Clear Europe |
| Best Used When | Sage respecting calculated pivot levels with clear price reactions |
| Lse Applicability | Sage suits pivot points as the FTSE 100's flagship listed software name, with steady institutional ownership that produces reliable level respect; adequate order-book liquidity gives reasonably clean reactions at pivots; a sector bellwether whose support/resistance behaviour is relatively predictable. Caveat: single-stock and single-stock-derivative depth is thinner than in the deepest global single-stock markets, so level reactions can be less pronounced and intraday gaps a little more common. |
| Fca Compliance | Standard technical-analysis strategy with no FCA authorisation requirement for personal trading; educational simulation only. Leveraged access via CFDs or spread bets is an FCA-regulated activity carrying retail leverage caps, margin close-out and negative-balance protection. |
| Lot Sizes | 1,000 shares per contract on ICE Futures Europe (~£8,850 notional at 885p); third-Friday MONTHLY expiry only - no weekly single-stock options • 1 CFD = 1 share; flexible size, margin-based, no fixed lot (the practical leveraged 'futures-like' route for UK retail) • No lot restriction, typically 50-500 shares; 0.5% Stamp Duty Reserve Tax on purchase |
| Trading Hours | 08:00 - 16:30 London time (GMT/BST); opening auction 07:50-08:00, closing auction 16:30-16:35; daily pivots calculated from the prior session's High, Low, Close |
| Expiry Considerations | Single-stock options are MONTHLY only (third Friday of the expiry month); there are no weekly single-stock options in the UK, so monthly pivots matter more than weekly pivots for options-expiry positioning. Only the FTSE 100 index complex offers more frequent (weekly) expiries. |
| Tax Implications | Cash equity: gains subject to Capital Gains Tax (18% basic / 24% higher rate, 2025/26) above the £3,000 annual exempt amount, plus 0.5% SDRT on purchase. CFDs: CGT, no stamp duty, losses offsettable. Spread betting: tax-free for UK retail (HMRC gambling treatment), no CGT/stamp duty but losses non-offsettable. ISA shelters cash holdings tax-free up to £20,000/yr. Trader vs investor (and any income-tax treatment) decided by HMRC 'badges of trade'. |
Calculate pivots before market open using the prior session's High, Low, and Close (16:30 LSE close). Have all levels ready by 07:45 for the opening auction and 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 16:15). 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 the prior day's CPR that was never touched. When price eventually reaches it, expect a 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 the 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 a single stock. Trade pivots across 3-5 liquid stocks. Track metrics by level and time of day for optimization.
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