The pivot points intraday strategy is a structured and highly effective method that uses predefined support and resistance levels to capture short-term trading opportunities. Pivot points provide a roadmap for price action during the trading day, helping traders plan entries, exits, and risk management with precision.

In this article, we explain how the pivot points intraday strategy works and how to apply it successfully across different markets.

What are Pivot Points in Trading?

Pivot points are technical analysis indicators based on the previous day’s high, low, and close. They create key levels for the next trading session:

• Pivot Point (P): The main level — (High + Low + Close) ÷ 3
• Support 1 (S1), Support 2 (S2): Potential areas where price may find support.
• Resistance 1 (R1), Resistance 2 (R2): Potential areas where price may face resistance.

Pivot points are widely used by professional traders in forex, stocks, commodities, and indices.

Why the Pivot Points Intraday Strategy Works

• Provides a Predefined Framework: Levels are known before the session starts.
• Identifies Key Zones: Traders know in advance where price may reverse or break out.
• Works Across Markets: Pivot points are respected in highly liquid markets.

How to Set Up the Pivot Points Intraday Strategy

Here’s how to prepare:

1. Add standard pivot points to your 5-minute, 15-minute, or 30-minute chart.
2. Focus on liquid instruments like EUR/USD, GBP/USD, gold, and S&P 500.
3. Know where the main pivot point, S1, S2, R1, and R2 are located at the start of the session.

Choose New York close pivots if trading forex for the best alignment.

How to Trade the Pivot Points Intraday Strategy

Here’s a structured approach:

1. Determine Market Bias

• Above the Pivot (P): Bullish bias — look for buying opportunities.
• Below the Pivot (P): Bearish bias — look for selling opportunities.

Pro Tip: If price hovers near the pivot early in the session, wait for a decisive move.

2. Entry Strategy

• Buy Setup:
  • Look for price to bounce off the pivot point or S1 with bullish reversal candlestick patterns.
  • Alternatively, buy a confirmed breakout above R1 on strong volume.
• Sell Setup:
  • Look for price to bounce down from the pivot point or R1 with bearish reversal candlestick patterns.
  • Alternatively, sell a confirmed breakout below S1 on strong volume.

Confluence with moving averages or momentum indicators (like RSI) strengthens the setup.

3. Stop-loss Placement

• For long trades, place the stop-loss just below the pivot point or S1.
• For short trades, place the stop-loss just above the pivot point or R1.

This keeps risk tight and well-defined around logical support or resistance levels.

4. Profit Target

• First target: Next pivot level (e.g., from P to R1 or S1).
• Second target: Next major level beyond R2 or S2 if momentum is strong.

Trailing stops can help lock in profits during strong directional moves.

5. Risk Management

• Risk only 0.5% to 1% of your account per trade.
• Avoid entering trades when price is stuck exactly at the pivot point without clear direction.

Best Practices for Pivot Points Intraday Trading

• Trade With Momentum: Use momentum indicators to confirm direction when price approaches pivots.
• Use Volume Confirmation: Strong volume on breakouts strengthens reliability.
• Stay Flexible: Pivot point reversals and breakouts both offer opportunities depending on the session’s tone.

Pivot Point Variations

• Camarilla Pivots: Focus on tighter intraday levels for aggressive trading.
• Woodie’s Pivots: Slightly different formula that puts more weight on closing prices.

Standard pivots are most commonly used by retail and institutional traders alike.

Common Mistakes to Avoid

• Ignoring Market Bias: Only trade in the direction of the bias unless you have strong reversal confirmation.
• Overtrading Every Level: Be selective; not every touch of a pivot warrants a trade.
• Setting Stops Too Tight: Allow a little room beyond pivot levels for natural market fluctuations.

Advantages of the Pivot Points Intraday Strategy

• Structured and Objective: Levels are calculated automatically and do not change.
• Works Across Markets: Forex, stocks, commodities, and indices all respect pivots.
• Perfect for Intraday Traders: Provides quick, logical trade setups.

Conclusion

The pivot points intraday strategy offers traders a consistent, rule-based approach to capturing profitable intraday moves. By respecting predefined support and resistance levels, waiting for clear signals, and applying disciplined risk management, traders can navigate daily market swings with confidence.

To master professional techniques like the pivot points intraday strategy and build a complete trading plan, explore our expert Trading Courses designed to help you trade smarter, faster, and more successfully.