Pivots - Turning Points

There are "classic" pivots used in the market; we want to focus on these "classics" using the higher timeframe and that leaves some choice for each trader.

Open
High
Low
Close

Common

The two most obvious & widely used pivots to prepare for the trading day are

Yesterday High
Yesterday Low

We also have five other pivots for premarket work

Yesterday's Globex High
Yesterday's Globex Low
Globex High
Globex Low
Globex Open

And within the trading day we have

5-min High
5-min Low
RTH Open

More Pivots

A few more classic pivot points are

PREVIOUS WEEK HIGH
PREVIOUS WEEK LOW
PREVIOUS WEEK CLOSE

and then we have

NEW WEEK OPEN
NEW WEEK HIGH
NEW WEEK LOW

Practice defining the Trend

The less obvious turning points (pivots) are when we look left. Here in the picture below we have just opened into the RTH session (far right candle) and have defined the globex low, the last pivot high and a lower TL. This picture shows the RTH open in the farthest right candle (basically the last candle to the right).

Turning Points - a near term turning point (pivot) would be that globex low & the upper white line.
Support is the globex low
Resistance is the white line marked "pivot."

We can trade "to the white line" or we could see the line, plan the trade & wait for price to make contact with the white line.

We DO NOT want to trade w/o a turning point (pivot).

Resistance / Support

In the picture below we can see that resistance held into the RTH session and the move lower from the previous day & through the globex has continued.

Support from the globex session is now getting tested and at this point we could try to trade the reversal or the continuation. We would want to evaluate the DOM and the order flow, the rest of the indexes and market breadth.

From all of that data we could trade here. One approach is the bounce; if we bounce there the first target is the tweezer bottom near 4072. If we play the continuation - then the first target is 50% of the measured move lower.

Below is another picture of the same trading day - just later in the day. Through the RTH session we revisited the globex pivots and we expanded farther beyond them & created RTH pivots.

Looking back at the trading day - we can see there were multiple opportunities to trade reversals from the pivots.

We had Busby plays, Double Bottoms, Double Tops, Breakouts, Flags, Wedges, Ranges, and TL breakovers. So many complex plays and a few "basic" plays.

Consider where liquidity rests on a day like this and why price continued to reach past the current pivot points.

From a Pivot

We always want to trade from a pivot as it gives us a starting point for the trade. We can approach this by

Identify where the pivot is located
Determine what a reversal would give us
Determine what a breakout (continuation) would give us

Steps to take include

Look at the higher timeframe to determine bias
Calculate the Risk / Reward for both trades.

Pivots