Price Action : Pivot Points

A free video tutorial from Corey Halliday
professional trader and educational instructor
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Price Action : Pivot Points

Lecture description

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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A 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 Pivot's, they're just changes in direction and momentum, right? You're trading up and then you pivot and trade to the down side. 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 as simple as basically just to dot look through the noise and just say, if I was 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 to dot. And as you do that, it will carry you through to the various pivot points now at. The pivot point is the highest candle of the pivot high or the lowest candle 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 pick 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 in this three candles as we've been moving this way. Then we pivot with our foot and we want to turn our body and go the other direction. Same kind of look and feel and and concept here. Now, there's 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. It's 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 overall? The general direction is from lower left, 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. 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 guys lined up in the same location. In other words, we didn't accelerate through there. We fell back. 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 battle ground, which belonged 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 battleground, so you can kind of think of it as territory, right, that became a buying territory after the settlers lost control of that area of the market. So key 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 the chart. Three candles created. 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 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 in control of that stock.