Pivot Points

The Pivot Points is a advanced indicators indicator used in Skyrexio Strategy Builder for advanced market analysis and complex signal generation.

Introduction

Pivot Points are a support and resistance calculation system that provides objective price levels based on the previous period's high, low, and close prices. This advanced indicator offers context-dependent signals for both LONG and SHORT opportunities by identifying key levels where price is likely to react, making it essential for intraday trading and level-based strategies.

How Pivot Points Work

Pivot Points calculate potential support and resistance levels using mathematical formulas based on the previous period's price data. The system creates a central pivot point and additional support/resistance levels that serve as natural price targets and reversal zones.

Calculation Method:

• Main Pivot (PP): (High + Low + Close) / 3

• Resistance 1 (R1): (2 × PP) - Low

• Support 1 (S1): (2 × PP) - High

• Resistance 2 (R2): PP + (High - Low)

• Support 2 (S2): PP - (High - Low)

Key Applications: • Support/Resistance levels - Objective price levels where reactions are expected • Breakout/Breakdown signals - Price breaking pivot levels confirms directional moves • Target setting - Pivot levels provide natural profit targets • Intraday strategies - Particularly effective for day trading and scalping • Risk management - Logical stop-loss placement at pivot levels

Market Psychology: Pivot Points work because they represent mathematically-derived levels that many traders watch simultaneously. When price approaches these levels, increased buying/selling activity often occurs, creating self-fulfilling prophecies that validate the levels' importance.

Key Characteristics

Attribute	Details
Category	Advanced Indicators
Type	Support/Resistance System
Primary Use	Level identification and breakout trading
Timeframe	All timeframes supported (1m to 1M)
Confirmation	Volume, momentum, price action

Strategy Applications

🟢 LONG STRATEGY (Support Bounce & Resistance Break)

Use Pivot Points for LONG entries when price bounces off support levels (S1, S2) or breaks above resistance levels (R1, R2, PP), indicating potential bullish momentum.

Base Entry Order (LONG)

Trigger Type: Once per bar close
Bar TF: 1H

First Condition: Close Price
Timeframe: 1H
Operator: Greater Than
Second Condition: Pivot Points
Timeframe: 1H

AND

First Condition: Volume
Timeframe: 1H
Operator: Greater Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H

Additional Entry Orders (LONG)

Additional Entry 1: Strong resistance breakout
First Condition: Close Price
Timeframe: 1H
Operator: Greater Than
Second Condition: Pivot Points
Timeframe: 1H

AND

First Condition: RSI
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 55

AND

First Condition: Volume
Timeframe: 1H
Operator: Greater Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H

OR

Additional Entry 2: Support bounce confirmation
First Condition: Close Price
Timeframe: 1H
Operator: Greater Than
Second Condition: Low Price
Timeframe: 1H

AND

First Condition: RSI
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 45

Take Profit Orders (LONG)

Rule 1: Exit condition - Next resistance level reached
First Condition: Close Price
Timeframe: 1H
Operator: Greater Than
Second Condition: Pivot Points
Timeframe: 1H

OR

Rule 2: Exit condition - Overbought at resistance
First Condition: RSI
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: 75

AND

First Condition: Close Price
Timeframe: 1H
Operator: Greater Than
Second Condition: Pivot Points
Timeframe: 1H

OR

Rule 3: Exit condition - Volume exhaustion signal
First Condition: Volume
Timeframe: 1H
Operator: Less Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H

Stop Loss Orders (LONG)

Rule 1: Stop loss - Price breaks below support
First Condition: Close Price
Timeframe: 1H
Operator: Less Than
Second Condition: Pivot Points
Timeframe: 1H

OR

Rule 2: Stop loss - Volume confirms breakdown
First Condition: Volume
Timeframe: 1H
Operator: Greater Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H

AND

First Condition: Close Price
Timeframe: 1H
Operator: Less Than
Second Condition: Low Price
Timeframe: 1H

OR

Rule 3: Stop loss - Momentum reversal confirmed
First Condition: MACD Line
Timeframe: 1H
Operator: Cross Below
Second Condition: MACD Signal Line
Timeframe: 1H

🔴 SHORT STRATEGY (Resistance Rejection & Support Break)

Use Pivot Points for SHORT entries when price rejects from resistance levels (R1, R2, PP) or breaks below support levels (S1, S2), indicating potential bearish momentum.

Base Entry Order (SHORT)

Trigger Type: Once per bar close
Bar TF: 1H

First Condition: Close Price
Timeframe: 1H
Operator: Less Than
Second Condition: Pivot Points
Timeframe: 1H

AND

First Condition: Volume
Timeframe: 1H
Operator: Greater Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H

Additional Entry Orders (SHORT)

Additional Entry 1: Strong support breakdown
First Condition: Close Price
Timeframe: 1H
Operator: Less Than
Second Condition: Pivot Points
Timeframe: 1H

AND

First Condition: RSI
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: 45

AND

First Condition: Volume
Timeframe: 1H
Operator: Greater Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H

OR

Additional Entry 2: Resistance rejection confirmation
First Condition: Close Price
Timeframe: 1H
Operator: Less Than
Second Condition: High Price
Timeframe: 1H

AND

First Condition: RSI
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: 55

Take Profit Orders (SHORT)

Rule 1: Exit condition - Next support level reached
First Condition: Close Price
Timeframe: 1H
Operator: Less Than
Second Condition: Pivot Points
Timeframe: 1H

OR

Rule 2: Exit condition - Oversold at support
First Condition: RSI
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: 25

AND

First Condition: Close Price
Timeframe: 1H
Operator: Less Than
Second Condition: Pivot Points
Timeframe: 1H

OR

Rule 3: Exit condition - Volume exhaustion signal
First Condition: Volume
Timeframe: 1H
Operator: Less Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H

Stop Loss Orders (SHORT)

Rule 1: Stop loss - Price breaks above resistance
First Condition: Close Price
Timeframe: 1H
Operator: Greater Than
Second Condition: Pivot Points
Timeframe: 1H

OR

Rule 2: Stop loss - Volume confirms breakout
First Condition: Volume
Timeframe: 1H
Operator: Greater Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H

AND

First Condition: Close Price
Timeframe: 1H
Operator: Greater Than
Second Condition: High Price
Timeframe: 1H

OR

Rule 3: Stop loss - Momentum reversal confirmed
First Condition: MACD Line
Timeframe: 1H
Operator: Cross Above
Second Condition: MACD Signal Line
Timeframe: 1H

Advanced Strategy Combinations

Multi-Timeframe Pivot Analysis

Setup

Timeframe Hierarchy:

• Daily: Major pivot levels for swing trading

• 4H: Intermediate pivot levels for position entries

• 1H: Execution timeframe for precise entries

• 15m: Fine-tuning entry timing

Execution

Entry: 1H pivot break confirmed by 4H level Target: Next major pivot level Stop: Previous pivot level in opposite direction

Pivot Point Bounce Strategy

Setup Process:

1. Identify key pivot levels (PP, R1, S1, R2, S2)

2. Wait for price to approach pivot level

3. Look for bounce signals (reversal patterns, momentum divergence)

4. Enter in bounce direction with volume confirmation

Execution:

• Base Order: Price bounce off pivot level

• Additional: Momentum and volume confirmation

• Take Profit: Next pivot level or 50% retracement

• Stop Loss: Break of pivot level with volume

Pivot Point Breakout Strategy

Breakout Levels:

• R2 Break: Strong bullish signal, target R3 or higher

• R1 Break: Moderate bullish signal, target R2

• S1 Break: Moderate bearish signal, target S2

• S2 Break: Strong bearish signal, target S3 or lower

Trading Rules:

• Confirm breaks with volume and momentum

• Use previous pivot level as stop-loss

• Target next pivot level for profit-taking

• Avoid trading during low volume periods

Risk Management Guidelines

Position Sizing

Strategy Type	Position Size	Conditions
Major Level Break	Standard	R2/S2 breaks with volume
Minor Level Break	Reduced (75%)	R1/S1 breaks
Pivot Bounce	Small (50%)	Counter-trend plays
Multiple Confirmations	Increased	Volume + momentum + level

Pivot Points Reliability Factors

High Reliability

✅ Multiple timeframe pivot confluence ✅ High volume at pivot levels ✅ Clean breaks without false signals ✅ Momentum indicators confirm direction

Low Reliability

❌ Low volume at pivot levels ❌ Choppy price action around pivots ❌ Conflicting momentum signals ❌ Multiple false breaks

Best Practices

For LONG Strategies

1. Support bounces - Look for price bouncing off S1/S2 levels

2. Resistance breaks - Enter when price breaks R1/R2 with volume

3. Volume confirmation - Ensure pivot breaks are backed by volume

4. Multiple timeframes - Use daily pivots for swing, hourly for day trading

For SHORT Strategies

1. Resistance rejections - Look for price rejecting from R1/R2 levels

2. Support breaks - Enter when price breaks S1/S2 with volume

3. Volume confirmation - Ensure pivot breaks are backed by volume

4. Multiple timeframes - Use daily pivots for swing, hourly for day trading

Common Mistakes to Avoid

• Ignoring volume - Always confirm pivot breaks with volume

• Chasing late breaks - Don't enter after price is far from pivot level

• Wrong timeframe - Match pivot timeframe to trading style

• No confirmation - Don't trade pivot levels without additional signals

Market Conditions Analysis

Market Type	LONG Strategy Effectiveness	SHORT Strategy Effectiveness
Uptrend	🟢 High (resistance breaks)	🟡 Medium (support bounces)
Downtrend	🟡 Medium (support bounces)	🟢 High (support breaks)
Ranging	🟢 High (pivot bounces)	🟢 High (pivot bounces)
Breakout	🟢 High (level confirmation)	🟢 High (level confirmation)
Low Volume	🔴 Low (wait for confirmation)	🔴 Low (wait for confirmation)

Related Indicators

Indicator	Relationship	Link
Volume	Breakout confirmation	Volume
RSI	Overbought/oversold at levels	RSI
MACD	Momentum confirmation	MACD
Fractals	Natural support/resistance	Fractal

Conclusion

Pivot Points provide objective, mathematically-derived support and resistance levels that are widely watched by traders. Their effectiveness comes from the collective attention they receive, creating natural reaction zones where price often reverses or accelerates.

Key Takeaways

• PRIMARY USE: Support/resistance level identification

• SECONDARY USE: Breakout/breakdown confirmation

• TERTIARY USE: Profit target and stop-loss placement

• ALWAYS: Confirm pivot breaks with volume and momentum

Success with Pivot Points requires understanding that they represent areas of potential price reaction rather than guaranteed reversal points. Use them as part of a comprehensive strategy that includes volume confirmation and momentum analysis for the highest probability trades.

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