To understand the Pivot point reversal strategy indicator, we must first know what a pivot point is. It is among the professional indicators traders use while trading. It helps to explain the market’s general trend in different time frames.
At the centre, the pivot point usually entails the previous day’s closing prices and highs and lows of the market. Suppose you trade above the pivot point the following day; this signifies bullish sentiment. Contrarily, trading low conveys a bearish view of the market.
A Standard Pivot Point Strategy
This is usually on the pivot point levels. It also includes the analysis of yesterday’s help and opposition. It is essential to examine these levels’ movements. This will help in guessing the market’s trend and direction.
It is also possible for complicated pivot points to occur in specific scenarios. This may happen if the pivot point formation goes on for some time.
The Method of Pivot Point Reversal
The pivot point reversal method can be under two scenarios. These are the initial support level’s action of price action in a scenario with a likelihood of an increase in the prices of securities or indexes (bullish) or vice versa (bearish) during initial resistance levels. Traders adhere to the common trend and begin trading after a reversal analysis of pivot point levels. You can go ahead and try out the Tradingview indicators and find out more.
Pivot Reversal Strategy | Indicator Series Click To TweetThe following are some pivot point reversal strategies:
- Establish levels of pivot points
- Establish the core trend
- Execute the pivot point reversal strategy
The closing price is usually the main focus of the pivot point. This relates to the pointer that indicates two different readings – the highest high or the lowest Low. Below are some situations illustrating the indicator’s behavior:
In case of an end to an up trend: The close falls lower than that day’s Minimal Point, which has the best High.
In case of an end to a downtrend: the close falls over that day’s highest point, which has the lowest Low.
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If you want to know how markets move and are unsure on how to proceed, try out the pivot reversal strategy indicator today. The tool will help you know when prices go below or above the pivot points. At DGM Tech solutions, we leverage technology for the financial services industry. Contact us now if you have any further inquiries!