7 Secrets of Pivot based Analysis.

   

    7 Secrets of Pivot based Analysis.

Market Generated.

    Leading Indicator (You can predict the trend).

    Self-adjust to volatility.

    Scalability.

    Reveal confluence.          

    Algo Advantage.

    Universally Applicable.

 

 Market Generated

Pivots that are based on market generated information, like price and volume, tend to see greater market participation at those levels. There are Floor pivots, Camarilla pivots, Market Profile Pivots and Pivot boss pivots these all pivots are based on the market information.

 This market-based information is very important because it’s all about volume and price, that is the auction, the auction is about volume and price and it’s based on the supply and demand, supply and demand is about the overvalued situations and undervalued situations when you understand those situations you can easily understand when to enter the market and when not to enter or when to exit from the market.

 This information will be an edge on your trading system. It will make your trading much easier in terms of identifying when to engage and when not to engage.

 

Leading, Predictive

Pivot points are leading indicators and offer many ways to accurately forecast and anticipate future price direction and behaviour. 

What you mean by leading?

 when you plot pivot points on your chart you can easily identify the key levels of the upcoming days. It allows you to make a plan for trading. As you know premarket analysis and studies are very important to intraday traders, having a proper trading plan before you enter the market will give you an extra advantage in the market.

 

Adjust to volatility

As you know volatility is one of the important factors of day trading. Since pivots are based on market generated data, the forecasted levels automatically adjust to the market’s current volatility. 

The market will go through various volatility phases. (From high volatility to low volatility and from low volatility to high volatility). The volatility will not be the same all the time for the stocks or indices, so that’s very important because these pivots are self-adjust to volatility.

 

Scalability

Pivots are scalable to any timeframe; The pivot points are the same for any time frame For example if you plot Pivot points on your 1min chart or 1hr chart, the levels will be the same, so you can use pivot point to scalping trades, positional trades or swing trades.

 

Reveal Confluence

Whether it is a multiple timeframe confluence. Or multiple pivot confluence, the ability to reveal these hidden areas of support and resistance provides you with a huge edge in the market.

 

Algo advantage

Pivots lend themselves perfectly to creating mechanical or fully automated algorithms to find and execute trading opportunities. For the algorithm-based trading systems, they should have proper entry points and exit points. Here we have accurate levels on pivot points to execute the trades.

 Most algorithmic trading systems facing risk management problems pivots points rectify those problems by having proper stop-loss and target levels based on the support and resistance levels of the pivot point.

 

Universally applicable

Pivot based analysis can be universally applied to any market and any time frame, regardless of your trading style. Pivot points can be used in Equity Market, Forex, Commodity and Future and Options segments.