HOW TO TRADE PIVOTS THE RIGHT WAY
Updated
Best Pivot Point Strategy PDF
Pivot Points are one of our favorite trade setups, and we’re going to show you what is the best method to trade pivot points through our best pivot point strategy PDF.
The pivot point strategy doesn’t require significant trading capital, and it can yield positive results right away.
More often than not retail traders use pivot points the wrong way. They usually sell to quickly when the first pivot point resistance level is reached and buy too soon when the first pivot point support level is reached.
This is the wrong way to trade because you’re trading against the prevailing momentum which is one of the reasons why retail traders lose money.
Now, before we go any further, we always recommend taking a piece of paper and a pen and note down the rules of the trading strategy. For this article, we’re going to look at the sell side.
Step #1: Trade only at the London open or the 8:00 AM GMT
The best time to trade the pivot points strategy is around the London session open. However, it can be used for the New York session open with the same rate of success.
We trade the London open because that’s the time big banks are opening for business, and the smart money operates in the market.
Note* We’re going to use the 15-minutes time frame and trade based off of the daily pivot points.
Step #2: Sell at the market if after the first 15-Minutes we’re trading below the Central Pivot Point
If after the first 15-minutes into the London trading session we’re trading below the central pivot point then we sell at the market.
The trade logic behind this simple rule is that once the market is displaying a disposition to trade below the central pivot point, the same as with the law of motion, we assume that the bearish momentum will continue to persist.
If the price of any currency pair is trading below the central pivot point, then the bias for the day is bearish and we’re only looking for selling opportunities.
Important Note * If after the first 15-minutes into the London session we’re too close to the first support level we better skip this trade opportunity because the profit margin has tightened.
Step #3: Hide your Protective Stop Loss 5-10 pips above the Central Pivot
It’s essential to have a good strategy for your stop loss as much as to have an entry strategy.
If the price breaks above the central pivot point then the sentiment has shifted on the bullish side and it’s wise to get out of any short trades. However, in order to accommodate any false breakouts, we also use a buffer of about 5-10 pips above the central pivot point for our SL.
Step #4: Take Partial Profit #1 at Support 1; Take Partial Profit #2 at Support 2.
We employ a multiple take profit strategy because we want to make sure we give the market the chance to reach for deeper support levels.
The first pivot point support level is the first trouble area and we want to bank some of the profits here. We also advice moving your protective stop loss to break even after you took profits.
At the second pivot point support level is where we want to liquidate our entire position and be square for the day.
Note** the above was an example of a SELL trade using the best pivot point strategy PDF. Use the same rules for a BUY trade – but in reverse.
To find out the complete strategy with chart examples PM me and I will be happy to help.
Pivot Points are one of our favorite trade setups, and we’re going to show you what is the best method to trade pivot points through our best pivot point strategy PDF.
The pivot point strategy doesn’t require significant trading capital, and it can yield positive results right away.
More often than not retail traders use pivot points the wrong way. They usually sell to quickly when the first pivot point resistance level is reached and buy too soon when the first pivot point support level is reached.
This is the wrong way to trade because you’re trading against the prevailing momentum which is one of the reasons why retail traders lose money.
Now, before we go any further, we always recommend taking a piece of paper and a pen and note down the rules of the trading strategy. For this article, we’re going to look at the sell side.
Step #1: Trade only at the London open or the 8:00 AM GMT
The best time to trade the pivot points strategy is around the London session open. However, it can be used for the New York session open with the same rate of success.
We trade the London open because that’s the time big banks are opening for business, and the smart money operates in the market.
Note* We’re going to use the 15-minutes time frame and trade based off of the daily pivot points.
Step #2: Sell at the market if after the first 15-Minutes we’re trading below the Central Pivot Point
If after the first 15-minutes into the London trading session we’re trading below the central pivot point then we sell at the market.
The trade logic behind this simple rule is that once the market is displaying a disposition to trade below the central pivot point, the same as with the law of motion, we assume that the bearish momentum will continue to persist.
If the price of any currency pair is trading below the central pivot point, then the bias for the day is bearish and we’re only looking for selling opportunities.
Important Note * If after the first 15-minutes into the London session we’re too close to the first support level we better skip this trade opportunity because the profit margin has tightened.
Step #3: Hide your Protective Stop Loss 5-10 pips above the Central Pivot
It’s essential to have a good strategy for your stop loss as much as to have an entry strategy.
If the price breaks above the central pivot point then the sentiment has shifted on the bullish side and it’s wise to get out of any short trades. However, in order to accommodate any false breakouts, we also use a buffer of about 5-10 pips above the central pivot point for our SL.
Step #4: Take Partial Profit #1 at Support 1; Take Partial Profit #2 at Support 2.
We employ a multiple take profit strategy because we want to make sure we give the market the chance to reach for deeper support levels.
The first pivot point support level is the first trouble area and we want to bank some of the profits here. We also advice moving your protective stop loss to break even after you took profits.
At the second pivot point support level is where we want to liquidate our entire position and be square for the day.
Note** the above was an example of a SELL trade using the best pivot point strategy PDF. Use the same rules for a BUY trade – but in reverse.
To find out the complete strategy with chart examples PM me and I will be happy to help.
Note
1st take profit hitNote
GBP strengthened and hit adjusted SLEUR hit 2nd target profit
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