Pivot Points for Fun and Profit Intraday SPY Apr 7

Apr 7, 2010: 7:29 PM CST

I’m not a huge fan of intraday pivot points personally, but even I have to admit they can be effective when combined with other methods of finding potential turning points or support and resistance during your intraday trading activities.

Today was a day where standard pivot points worked well at key turning points, allowing you to take off profitable positions (play for a target) or put on new positions (enter at a potential reversal).

Let’s take a look at the intraday grid to see today’s example:

(Click for full-size image)

For starters, we’re seeing the SPY 1-min chart with the NYSE TICK (blue) as the bottom indicator, along with the 20 and 50 EMAs (1-min).

The pivots shown are the following:

Blue:  Daily Pivot at $118.85
Light Green:  Support 1 Pivot at $118.45
Dark/Solid Green:  Support 2 Pivot at $117.89

These are auto-generated with an indicator I have for TradeStation, though you can calculate pivot points yourself via any number of websites or manual calculations, including Excel.

There are also alternative methods for calculating pivot points, but I tend to stick to the default/standard methods, because that’s what a lot of traders watch, and could cause self-fulfilling prophecies if traders see and act on these levels enough to affect price.

That being said, study the chart to see how price reacted to today’s dominant pivot levels.

Once one pivot level is broken, odds might favor that price can move to the next pivot level, supplying you a target to play for.

Also, if you start to see divergences or reversal candles (or price intersecting with a trendline of some sort) as price tests or comes in contact with a daily pivot level, this might be enough evidence for you to put on a trade with a tight stop just beyond the pivot zone to try to play for a bounce (or fall) off the current pivot level.

My style of trading combines non-correlated methods into finding high-probability, low-risk turning points, so I’m interested in anything that will help find potential support or resistance levels.  It’s still all about probabilities.

For a full description of today’s opportunities from an educational/reference standpoint (teaching concepts through repetition), and for the “forecasting tomorrow” section, become a member of the Idealized Trades Daily Commentary service (link provides more information).

I wanted to document today’s activity as a good example for those who love pivot points and incorporate them into their trading style.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade

1 Comment

One Response to “Pivot Points for Fun and Profit Intraday SPY Apr 7”

  1. Why A Pivot Points Method Should Be In Each And Every Forex Program Says:

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