Using Pivot Points Like Support and Resistance
The easiest way to use pivot points in your trading? Treat them just like your usual support and resistance levels.
Just like traditional support and resistance, price often tests these pivot levels multiple times. And the more times a level holds, the stronger it becomes.
After all, “pivoting” simply means price reaches a level — then reverses.
If price consistently reacts at a pivot level, that’s your clue: it could be a solid trading opportunity.
How to Trade It
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If price approaches a resistance level, you could SELL, placing your stop-loss just above that resistance.
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If price nears a support level, you could BUY, placing your stop-loss just below it.
Pretty straightforward — just like your usual support and resistance playbook!
Let’s Look at an Example
Here’s a 15-minute chart of GBP/USD.
Price is testing the S1 support level. If you believe it will hold:
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A conservative approach: Buy at market, place a stop below S2 (just in case S1 breaks).
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A more aggressive approach: Place your stop just under S1, expecting it to hold.
For your take profit, you might aim for the pivot point (PP) or even R1, which could act as resistance.
And what happened?
Boom! S1 held and price bounced. If you had targeted PP as your exit, you’d have hit your profit target. 🍦🍕 Time to celebrate!
A Few Words of Caution
Of course, it’s not always that clean-cut.
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Don’t rely on pivot points alone. Check if they line up with past support/resistance levels.
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Use candlestick patterns and indicators for confirmation. For example:
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A doji at S1
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An oversold signal on the stochastic
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These give extra confidence the level might hold.
Also, most trading action happens between S1 and R1. Sometimes price reaches S2 or R2, and only rarely will it test S3 or R3.
But sometimes, price just smashes through all the levels — like Rafael Nadal on a clay court. 🎾
So What Will You Do?
Will you sit and watch your trade collapse? Or adapt and fight back to recover some pips?
In the next lesson, we’ll show you how to trade when pivot levels break.
Let’s keep going!