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.