Price Action : Pivot Points
A free video tutorial from Corey Halliday
professional trader and educational instructor
4.4 instructor rating • 9 courses • 22,924 students
In this lecture we will talk about Pivot Points, Bulls vs Bears, Pivot High and Pivot Low Cases
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02:47:06 of on-demand video • Updated June 2017
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English [Auto] Little bit of a refresher we covered some of this and basic technicals but we're going to take it to another level. When you think of pivots there just changes in direction and momentum. Right. You're trading up and then you pivot and trade to the downside. These peaks and valleys create your pivot highs and lows. So you have the tops and you have the bottoms. And I always say it's a simple as basically just dot dot dot. Look through the noise and just say if I were to drag a straight line through most of the price action it will give you your pivot points right. Here's the top Here's the bottom. Here's the top Here's the bottom and so forth. And you can just drag that dot to dot. And as you do that it will carry you through to the various pivot points. Now the pivot point is the highest candle of the pivot high or the lowest candel of the pivot low and of course it takes three candles to create a pivot because you have to be moving in one direction and then pivot and turn to a new direction like a basketball player. You hit your pivot foot is the foot that stays in the same place and then you turn your body in one direction or the other so you can kind of think of it as we go up and this three candles is we've been moving this way. Then we pivot with our foot and we want to turn our body and go the other direction. Right. Same kind of look and feel and concept here. Now there is a constant battle that exists between buyers and sellers so when you think about what a pivot actually is it's just a representation of buying brain pressure and then selling pressure overwhelming that we're selling pressure pushing a stock down. And then the buyers coming in and overwhelming the sellers. So it's just a direct reflection of a change from buying pressure to selling pressure or vice versa. One group having control and the other taking control from them pivots also show us the trend if we plot them out. So you can see who's in control of the stock overall. And as we do the DOT DOT you'll notice that these peaks are climbing upward and these valleys are climbing upward. So who has control over all or the general direction is from lower left to upper right. That means you're in an uptrend. So although on a day to day basis we have to analyze who has control overall you'd say that the buyers have control the stock is in an upward pivot moving trend right. Higher peaks and higher valleys means that the stock has more buying pressure than selling pressure over this period of time now shows us also battlegrounds just because the stock is trending higher doesn't mean there wasn't a little bit of a battle that took place right in this general area. You see how two of the pivot highs lined up in the same location. In other words we didn't accelerate through there. We fell back and that was a pivot point. So an area that the market failed initially and then we went back up to the same level and failed again two failures at the same level create a stronger level of resistance. Now the stock eventually broke through so notice that battleground which belong to the sellers the Bears had control of that. The Bulls pushed up and through so now it belongs to the Bulls. And sure enough the they protect their battle ground. So you can kind of think of it as territory. Right. That became a buying territory after the sellers lost control of that area of the market. So he levels of support and resistance are created through these pivots as well. A pivot high is also known as a swing high. It forms when you've been trading up through buying pressure and then start to trade back down. And it just looks like a peak on a chart three candles create it. There must be a candle to the lower left and the lower right and then you have that that peak formation that pivot high a pivot low also known as a swing low is a stock that's been selling off and then is now starting to see some buying pressure. They look like a little valley or V-shape on the chart and it shows that the stock has been falling. Now buyers are regaining control. You have a candle to the upper left and upper right and right now the buyers are battling back and recovering you know control of that shot. So.