Need to understand "pivot points"

Technical Analysis
1

Hello friends,

I need to understand the Pivot Points. Please help me understand.

Thanks :slight_smile:

2

Pivot actually refers to a point about which something moves. So the point remains at rest and the thing moves.
Here pivot points are such points about which price moves, so at pivot point price may stay but when crosses it, its expected to move. The pivot points are obtained using different calculations.

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Thanks bro :slight_smile:

4

For the ones who want to dig into the pivot trading a little deeper, I recommend the book “Secrets of a Pivot Boss” by Franklin O. Ochoa.

I was first put off by the over the top title but surprisingly found the content practical and applicable to Indian market.

Overall, my experience with Pivots is that they work better with indices (nifty, bank nifty) than individual stocks.

-Neha (vrdnation.com)

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Thanks Neha

6

My understanding of pivot points as a noob is that it refers to turning points with respect to price on a stock chart. These turning points are defined differently by different strategies.

So a pivot point could be based on mathematical formulas such as Fibonacci levels or Gann levels or Floor Trader Pivot levels (S1/R1). Or it could be based on visual evaluation of charts such as Swing Highs and Swing Lows or Patterns or Support/Resistance defined by trendlines.

Googling those terms should give you a clearer idea about pivot points. HTH.

7

Pivot points are those important or critical levels which serve as support or resistance depending on where current price is either up or below them respectively. Pivot points range from Pivot point and span as R1 to R3 at times R4 for resistance and S1 to S3 at times S4 for support…

Pivot point is simply d average of high, low and close or hlc for various time-frames. For eg to find Pivot point for tomorrow, just avg today’s hlc. This is due to fact that hl r those sacrosanct levels that entire trading world wasnt able to breach in d day. C or close was that level where either strength (positive close) or weakness (negative close) prevailed. So in that respect avg of these 3 imp level will definitely lead to a respectable level which will serve as biggest turning point. Look if this post is useful to u…

Also for eg look what happened when tatamotors breached pivot point although that was monthly pivot level (dark black line)

Screenshot_20180627-130041
Screenshot_20180627-1300411080Ă—1920 146 KB

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Can we apply everything what is given in the book then what soft are is needed