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 | $25,000 - $150,000 for meaningful exposure (note: $25,000 is the FINRA Pattern Day Trader minimum equity for active day trading) |
| Margin Type | Cash account (unleveraged); margin account ~2:1 overnight (Reg-T); up to 4:1 intraday day-trade buying power under PDT; options for defined-risk leverage |
| Best Used When | ACN respecting calculated pivot levels with clear price reactions |
| Nyse Applicability | ACN ideal for pivot points due to deep institutional ownership creating reliable level respect; high liquidity as a large-cap S&P 500 IT-services bellwether ensures clean reactions at pivots; widely-watched leader with predictable support/resistance behavior. Note: U.S. single-stock futures are not available (OneChicago closed 2020), so leveraged directional exposure is taken via options or margin. |
| Sec Finra Compliance | Standard technical-analysis strategy, fully compliant with SEC and FINRA rules. Active intraday traders must observe the FINRA Pattern Day Trader rule (>=$25,000 account equity to place more than 3 day-trades in 5 business days in a margin account). Margin governed by Reg-T. |
| Contract Specs | 1 contract = 100 shares (standard U.S. equity options multiplier); ATM premium on ACN typically a few dollars depending on expiry/IV • Not available in the U.S. (OneChicago closed 2020); use equity options or Reg-T/portfolio margin for leverage • No lot restriction; trade any share quantity, typically 1-300 shares per pivot trade |
| Trading Hours | 9:30 AM - 4:00 PM ET (regular session); pre-market 4:00-9:30 AM, post-market 4:00-8:00 PM ET. Daily pivots calculated from prior regular-session OHLC. |
| Expiry Considerations | Monthly options expire the 3rd Friday; weekly options are available on this highly liquid name. Use the nearest weekly for intraday pivot trades and 2+ weeks for swing trades. Watch pin risk near round strikes around monthly OPEX. |
| Tax Implications | Equities/options held <1 year: short-term capital gains taxed as ordinary income (up to 37%); held >1 year: long-term capital gains (0%/15%/20%). Day-trading gains are short-term. Wash-sale rule (IRC Sec. 1091) disallows a loss if a substantially identical security is repurchased within 30 days. Active traders may elect Trader Tax Status / Sec. 475(f) mark-to-market - consult a CPA. |
Calculate pivots before market open using the prior day's High, Low, and Close (4:00 PM ET regular-session close). Have all levels ready by 9:00 AM ET for 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 3:45 PM ET). 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 prior day's CPR that was never touched. When price eventually reaches it, expect 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 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 single stock. Trade pivots across 3-5 liquid stocks. Track metrics by level and time of day for optimization.
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