The
pivot points level can be used for trading strategies, Firstly draw
the pivot points on the intraday chart.

Time
frame: 30 min, H1.

Currency
pairs: majors and Indices.

The
pivot points designes areas of support and resistance. The key is to
use the behaviour of the price candles at the pivot to determine
whether to buy or to sell.

**Trading Rules**

**Buy**

**Sell**

Usually, price would have been rejected at the pivot resistance line. Once this occurs, you can initiate a short trade at the open of the next candle. A Sell Limit entry is used if the previous candle’s close is several pips below the pivot resistance after that candle has tested the pivot without breaking it.

Exit position options:

1) The next pivot line above/below the pivot support/resistance is the nearest TP point.

2) Exit position ratio stop loss 1:15. Stop loss 20-25 pips depends by currency pairs.

This strategy is not for beginners and requires experience.

See Example

**The classic formula for Pivot Points levels**The first to make known the formulas for pivot calculation were Charles Le Beau and David W.Lucas in their volume "Computer Analysis of the Future Market". The classic formula includes the calculation of the Average Price obtained using the three most important prices of the previous session:

AP = (H + L + C) / 3

Where AP is the average price, H is the maximum price, L is the minimum price and C is the closing price.

After calculating the average price, calculate the 1st pivot resistance (PvH1) and the first pivot support (PvL1):

PvH1 = (2 * AP) - L

PvL1 = (2 * AP) - H

Where PvH1 is the 1st pivot resistance, PvL1 is the 1st pivot support, AP is the average price, L is the minimum price, H is the Maximum Price.

Once the first pivot levels are determined, it is possible to calculate the highest degree of resistance and support pivot:

PvH2 = AP - PvL1 + PvH1

PvL2 = AP - (PvH1 - PvL1)

Where PvH2 = 2nd pivot resistance, PvL2 = 2nd pivot support, PvH1 = 1st pivot resistance, PvL1 = 1st pivot support.

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