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Pivot Point Indicator (HowToTrade Cheat Sheet)

The document discusses the pivot point indicator, which uses the previous day's high, low, and closing price to calculate static support and resistance levels. It can help traders plan their day and predict where prices may find support or resistance. The key formulas to calculate the pivot point and additional support and resistance levels R1-R3 and S1-S3 are provided. The document also gives examples of how the indicator can be used for take-profit targets, breakout entries, counter-trend trades, stop-loss placement, and filtering out low risk/reward trades.

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Med Ayman Ayoub
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613 views4 pages

Pivot Point Indicator (HowToTrade Cheat Sheet)

The document discusses the pivot point indicator, which uses the previous day's high, low, and closing price to calculate static support and resistance levels. It can help traders plan their day and predict where prices may find support or resistance. The key formulas to calculate the pivot point and additional support and resistance levels R1-R3 and S1-S3 are provided. The document also gives examples of how the indicator can be used for take-profit targets, breakout entries, counter-trend trades, stop-loss placement, and filtering out low risk/reward trades.

Uploaded by

Med Ayman Ayoub
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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PIVOT POINT INDICATOR

C H E A T S H E E T

What is a pivot point?


• Pivot points are calculated based on the high, low, and closing price of the previous session.

• Includes support and resistance levels that are based on the pivot point calculation.

• Because all lines are static, it can help traders plan their day in advance.

• One of the easiest technical indicators.

HOW DOES IT WORK?


• Pivot point lines remain at the same level throughout the day.

• Used to predict support and resistance levels in the upcoming trading session

• These support and resistance levels can be used as profit-targets and stop-loss levels.

formula
(OUR PIVOT POINT CALCULATOR ON PAGE 4
WILL DO THIS FOR YOU!)

PIVOT POINT = (HIGH + LOW + CLOSE) ÷ 3


RANGE = HIGH − LOW
R1 = (PIVOT × 2) − LOW
R2 = PIVOT + RANGE
R3 = HIGH + 2 × (PIVOT − LOW)
S1 = (PIVOT×2) − HIGH
S2 = PIVOT − RANGE
S3 = LOW − 2 × (HIGH − PIVOT)

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The information provided within this PDF is for educational purposes only.
USING THE PIVOT POINT INDICATOR
1. USED FOR TAKE-PROFIT TARGETS TO SCALE OUT OF
PROFITABLE POSITIONS
In the example below, you can see that profit is taken when R lines are hit.

2. USED FOR BREAK-OUT ENTRIES


• Often old resistance becomes support, and vice-versa.

• The pivot point indicator can help with with-trend entries when lines get breached and retested.

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The information provided within this PDF is for educational purposes only.
3. USED FOR ENTRIES FOR COUNTER-TREND AND REVERSAL
• In the example below, an R line is hit twice. The double top indicated a trend-reversal.

4. USED FOR STOP-LOSS PLACEMENT


• To manage risk, you could put your stop-loss on or near one of the pivot point lines.

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The information provided within this PDF is for educational purposes only.
5. USED AS A FILTER TO KEEP OUT OF LOW RISK/REWARD TRADES
• Use key-levels of support and resistance to stay out of certain trades to increase your
win-loss ratio.

• If your profit-target is on the other side of an R or S line, price could stall before profit-target
is hit.

• For example, in the chart below, if your profit-target is above R3, it might be better to stay out.

FREE PIVOT POINT CALCULATOR


Not sure how to find pivot points on your chart?

Use the free Pivot Point Calculator at HowToTrade to find the significant
support and resistance levels immediately!

Get your free access today and join our trading room
The information provided within this PDF is for educational purposes only.

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