Day trading is very different from swing trading. It’s more difficult and it needs some particular tools to be profitable. Pivot Points are some of the tools that day traders can use.
In this article, I explain how they work.
What are Pivot Points?
Pivot points are price levels often used in intraday trading (but they can be used even in swing trading). They are considered “natural” supports and resistances for the price during a daily market session, so they can be quite useful for day traders because the market often behaves in a non-trivial way when it gets closer to them.
There are several types of pivot points, but the classic pivot points are usually defined starting from the last day’s high, low, and close price. Applying some mathematical calculations to these prices on the previous market day, a trader can calculate the pivot levels for the current market day and use them. In this article, I’ll focus on classical pivot points.
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