Here’s a detailed guide on weekly pivot points for swing trading cryptos.
I use the pivot point strategy every day for technical analysis. And can attest it has improved the way I trade.
That might be the same for you.
That’s why you’ll find proven steps on how to use pivot points in day and swing trading in this guide.
These simple steps are what work for me.
You can modify the tips and personalize them to create a strategy that is suited to you.
It all begins with dedicating quality time to study this guide on swing trading with pivot points and price action.
You may have to revisit it in the near future to learn something new.
So let’s get right into it.
What are Pivot Points in Trading?
Pivot points are key levels that could stall price’s movement.
Price may reverse or bounce off these levels. There could also be a breakout.
Most traders already know what these levels are.
And as such, they tend to open or close trades when price gets to the regions.
So it’s like a self-fulfilling prophecy that prices reverse at pivots thanks to demand and supply.
Compare it to your regular support and resistance lines.
Not all traders have mapped out exactly the same level.
It could be the same zone but not similar levels.
Here’s what I mean.
Out of 50 traders, only 20% may have drawn a support line at a level such as $50.51.
Another 25% may have drawn support at $50.70.
And another batch at $50.77.
What do you notice?
These traders have marked out the same $50 zone but not exactly the same level.
But that’s not the case with pivot points since it’s the same level that’s reflected on everyone’s chart.
So imagine how likely the market is to turn at a point since most traders have placed orders at the level.
Do you get the picture?
Read Also: Inverse Fisher Stochastic Indicator
On the other hand, swing trading means you’ll be holding your trades into the next day.
As such, the steps outlined in this guide are ideal for this type of short-term trading including scalping.
Pivot Point Types
There are various pivot point types.
These are the:
These pivots are mostly used in Forex and stock trading.
Nonetheless, you can use the same forex trading strategy in crypto.
Pivot Point Timeframes
There are also pivot point timeframes.
These timeframes include:
Walk with me as I explain some of these.
1. Auto Pivots:
These are default pivot levels that appear on the actual timeframe it’s meant for.
You’ll find them on all timeframes.
Day traders and mostly scalpers can use these levels on lower timeframes to enter and exit trades.
You’d be getting intraday pivot levels.
Swing trading using these pivot points is also possible.
2. Weekly Pivots:
Weekly pivots spring up on 30m, 1h, 2h, 3h, 4h, 6h, 8h, and 12h timeframes.
You’ll find the same levels when you move across each of these timeframes.
On the other hand, these are stronger support and resistance zones compared to intraday levels.
It’s the same way a weekly level on your chart will be harder to breach compared to that on a lower timeframe.
For this reason, weekly pivots can serve as confirmation to enter or exit a trade.
That’s because even though intraday pivots may have been breached, price could create a false breakout on these lower timeframes.
3. Monthly Pivots:
Monthly pivots are found on timeframes such as 1D, 2D, and 3D.
I don’t use these levels very often but they’re just as important.
It’s important because a candle’s close above a monthly pivot level could lead to rallying prices the next month.
And a close below the pivot’s support could decline prices further the next month.
Nonetheless, it takes longer for the monthly candle to form. You might not want to wait till the month’s end or start to pick a trade.
This is why using intraday and weekly pivots will serve you more often.
The monthly levels only give you a direction.
The levels hint if it’ll be an uptrend, downtrend, or sideways trend in the current month.
What are Pivot Point Support and Resistance Levels?
Here’s a section to pay close attention to.
It’s about the pivot support and resistance levels.
The support levels are labeled S1 (Support 1), S2 (Support 2), and S3 (Support 3).
Whereas the resistance levels are labeled R1 (Resistance 1), R2 (Resistance 2), and R3 (Resistance 3).
Some indicators may go further in these numberings to include levels like S4 and S5. The same goes for R4 and R5.
Now the pivot indicator has a main pivot called P.
P determines if price is bullish or bearish for the day.
I’ll break it down.
1. Bullish Sentiment with P and R Levels:
When price trades above P, this is bullish.
Price might make an attempt to break out of R1’s resistance and if it does, the level is now acting as support.
Check the Bitcoin/USDT 15-minute chart below for a better understanding.
An upward penetration of R1 means R2’s level is now resistance. And its breach turns the level into support.
So, what happens if price closes below R2?
Think about it!
It means R1 is the next potential support. Price could bounce off it or not.
And if R1 is also penetrated, P becomes the potential support.
The Bitcoin/USDT 15-minute chart below shows how price opened above P indicating it might be a bullish trading day.
That was the case given that price advanced to R1 and R2 levels.
The move into R1 and R2 was over-extended due to the large green bars. Those who’d missed out on a good entry took the opportunity to go long at retest.
Price later formed an inverse head and shoulders pattern before advancing to R2 again.
There was a three-bar play formation leading to a breach of R2’s resistance.
2. Bearish Sentiment with P and S Levels:
Candlesticks trading below P indicate bearishness.
It gets worse if these candles retrace to S1.
A breach of S1 turns the level into resistance with a potential move to S2.
And if S2 is also breached, S3 becomes a potential target for price.
Like the R levels which could act as support, the S levels can also act as resistance.
This is called a change in polarity.
It’s a market condition where previous support becomes resistance and previous resistance becomes support.
With that in mind, you’ll agree that the S and R pivot levels act as points of attraction.
They’ll tend to attract price to themselves especially when candles are close to the level.
But do not forget the most important level, which is P.
Price’s attraction to P might even be higher than these levels.
That brings us to the concept of the central pivot range (CPR).
What does it entail?
Read the next section.
I’ll quickly like to mention price opening below or above P for the day does not mean it’ll ‘certainly’ be a bullish or bearish day.
That’s why it’s important to watch how price reacts to each level.
And hence, do not just open long or short positions because of the opening price’s position relative to P.
Check the BTC/USDT chart below and you’ll grasp this concept better.
From the image, it later turned out to be a bullish trading day despite the earlier bearish signal.
Here’s another instance where price failed to maintain its bullish notion after opening above P.
On that note, you may have to wait for some candles to be created around the level before making an entry.
Remember, you must not be the first in the market.
Central Pivot Range Point
The earth’s gravity is the center of attraction to things above it.
This is basic physics that can be used in mastering pivot point trading.
In this case, P is the center of attraction.
It’ll tend to pull candlesticks that are right above or below it to itself.
And that’s why you may notice false breakouts from P.
For this reason, there is a central pivot range indicator.
This indicator maps out a zone around P.
And that zone tells you where the field of attraction is.
If price does not break above or below the field, then no entry or exit is made.
For instance, the basic pivot trading rule says long to R1’s resistance if price is trading above P.
But with the CPR or field, you’d be more cautious of taking the trade.
Such a trade would only be taken if price closes above the central pivot range’s resistance.
The Bitcoin/USDT 15-minute chart below shows how the high of CPR acted as support.
Imagine the number of people who were expecting price to land on P but it didn’t.
How did the trade turn out?
Check the chart below.
Price still found support on CPR and this time around, it advanced close to R.
But the range around R1 acted as resistance.
This shows you can also get CPR around R1.
You’d make use of it as you would with CPR around P. Don’t get confused, just study both charts.
If you understand the concept of resistance, you’ll be able to compare it to support.
Here, you’ll only short when price closes below CPR’s support.
And that differs from the regular way of making a short entry just because price is trading below P.
What this does is ensure that you do not get trapped in false breaks too often.
Pivot Point Formula for Day Trading
I don’t know much about the pivot point formula.
But for the sake of formality I’ve included it in this guide.
So if you’re particular about how things come about, this section is for you.
If not, you may want to skip the section entirely.
The pivot point formula for day trading is:
Pivot point (P) = (high + low + close)* / 3
S1 = (P X 2) — (high)
S2 = P — (high — low)
S3 = P (S3) — (R2 — S2)
R1 = (P x 2) — low
R2 = P + (high — low)
R3 = P — (S2 + R2)
The mathematical formulas above rely on the previous day’s high, low, and close for calculation.
How to Use Pivot Points in Day and Swing Trading
Here are easy steps on how to use pivot points in day and swing trading:
- Setup the indicator.
- Choose intraday levels.
- Choose weekly levels.
- Enable central pivot.
- Set stop loss.
- Check pivot trend.
1. Setup the Indicator:
TradingView is the platform I recommend for pivot trading.
You can set up the indicator on both its mobile and web version.
I’ll be using the web version of the platform in this example.
- Navigate to the indicators section at the top right corner of the screen.
- Search for ‘Pivot’
- Favorite the indicator ‘Pivot Points Standard’
You’ve just enabled the pivot indicator.
It’ll show up if you’ve not exhausted the maximum number of indicators you need on your account type.
Free TradingView accounts are allowed a maximum of three indicators at a time.
Some paid accounts support up to five indicators while others take as many as 25 indicators.
2. Choose Intraday Levels:
The intraday pivot levels in crypto are renewed every day by 1 am (UTC+1).
This means you can expect new levels on your Bitcoin, Ethereum, Binance Coin, Solana, Matic, Shiba, etc. chart at exactly this time of the day.
How do you spot the intraday levels?
- Navigate to any of these timeframes: 3m, 5m, or 15m.
- Click on the pivot indicator settings’ gear icon
- Scroll to the section ‘Pivot Timeframe’
- Ensure the setting is set to ‘Auto’
- Select ‘Ok’ to save changes.
And you’re done.
Now that these levels are active, here’s how to trade them:
- Long if price closes above P. (Refer to the central pivot range section on how to make the most of this rule).
- Short to P if price closes below R1. Keep in mind that this trade is risky since price is still above P, which is a bullish zone.
- Long if price closes above R1, R2, or R3.
In the Bitcoin/USDT 15-minute example below price failed to advance to R2.
Hence, always using a stop is ideal. You may also want to move to higher timeframes such as H1 and H4 to confirm candle closes above the level before entry or exit.
Keep in mind that the farther price is away from P, the more likely is a correction to occur.
That’s because price is over-extended or overbought already.
You’d be able to spot this extension if you enable moving averages like the EMA 8 AND EMA 50.
- Short when price closes below P.
The Matic/USDT 15-minute chart below is an example.
Price declined from P close to S1.
A signal to take profit came when price began making same lows close to S1.
- Short when price closes below S1, S2, and S3.
Price is more oversold the farther it is from P.
So if you’re making a short entry on S3 or levels lower, be wary that a correction could take place soon.
On the other hand, it’s not enough to trade with the intraday pivot levels even if you’re a scalper.
The weekly levels increase your chances of making a profit.
3. Choose Weekly Levels:
Price will definitely stall at weekly support or resistance pivot levels.
As such, it’s important that you turn on these levels even if you’re scalping.
Swing traders may only need to turn on the weekly pivot points.
And then trade from one level to the other.
Nonetheless, it pays to have a confluence of factors.
One of such factors is when the intraday pivot levels and weekly align.
It forms a stronger key level since scalpers and swing trades have lined entries at the levels.
Here are two ways to enable the weekly pivot:
- From the lower timeframes, goto pivot settings
- Change Pivot timeframe to ‘weekly’
- Click on ‘Ok’ to save changes.
Navigate to 30m, 1h, 2h, 4h, 6h, 8h, or 12h timeframe.
This depends on the timeframe you want to trade.
Swing trading is best done on timeframes between 30m and 4h.
If the pivot timeframe isn’t set to auto,
- Click on the pivot settings
- Set the timeframe to ‘Auto’
- Save changes using the ‘Ok’ button.
Note that you may as well turn on auto pivot on 15m and then use multiple timeframe analysis to get entry and exit confirmations.
4. Enable Central Pivot Range:
I’ve already explained what the central pivot range is.
Now it’s time to enable it. It’ll ensure you don’t get trapped in false breakouts.
Note the following:
Price has fully breached P when there is a candle close below or above CPR.
This means you won’t be using just P to determine if there is a breakout once you enable this indicator.
So, here’s how to proceed:
- Navigate to the Indicator’s section
- Search for ‘Central pivot’
Several results will be returned but choose the indicator whose interface is appealing.
I often use the Central Pivot Ranges & Pivot Based Barcolors.
Now that the indicator has been turned on, it’s time to make the most of it.
Simply wait for price to break CPR’s support before taking a short to S1.
It’s true that will be a late entry since price has already made its way into the S1 zone.
For this reason, you might want to wait until S1 is breached as well.
Keep in mind that this is just an extra confirmation to take a trade.
CPR isn’t a must-use but you’d appreciate the tool’s advantage every now and then.
Alternatively, longs to R1 can be taken when price closes above the central pivot range.
Here’s a BTC/USDT 5-minute image showing a long entry after price closed above CPR’s resistance.
A short could also be taken at a candle close below CPR’s support.
On the other hand, there was a need to go to a lower timeframe (5m) instead of the usual 15m in a bid to spot earlier closes.
You could also choose to wait till price trades above R1 to take a position.
The second option provides a better place to set your stop, which is right below R1 instead of CPR’s support.
Now let’s talk about stop losses.
5. Set Stop Loss:
You’re not gonna blow your spot or futures trading account overnight.
But you can only ensure the safety of your funds if you take your stop whether you choose to long or short.
A stop can be placed below the pivot level you made a long entry.
It can also be placed above the level you took a short entry.
And if you choose to use CPR, its support and resistance now become areas of placing your stop.
But note that this will widen your stop-loss margin.
In this case, you’ll have to determine your risk to reward before taking the trade.
You should earn at least twice the amount you’re likely to lose.
The Bitcoin/USDT 5-minute chart below shows a risk to reward of 1:1.9.
That’s almost twice the amount of what you could lose. Hence it’s worth taking the trade. You’ll get a better R:R if the stop was placed directly below P instead of CPR.
7. Check Pivot Trend:
Here’s a tip that’ll improve the way you trade with pivot points.
And it’s by confirming the price trend on the pivot levels.
Does price have a habit of trading above the central pivot?
If it does then the market is currently very bullish.
You’d do better to trade in the direction of the bullish trend.
On the other hand, price trend below central pivot range hints the market condition is bearish.
And you’re better off being a bear or staying away completely.
Start by enabling the pivot for the past few days. And then monitor the trend.
- Click on the Pivot settings
- In the section ‘Enable Pivot for the next days’ enter a value of your choice such as ’15’
- Click on ‘Ok’ to save changes.
Candlestick and Pivot Point Trading Triggers
Candlestick and pivot points can act as entry and exit triggers.
You’ll be using bullish and bearish candlesticks to confirm your entries and exits.
Bullish candlesticks include the hammer, bullish engulfing, piercing pattern, and bullish harami.
There’s also the bullish abandoned baby and morning star.
Hammers and morning star, for instance, often form at pivot levels’ support. Hence, be on the watch for them.
Bearish candlesticks that could appear at pivots resistance include hanging man, shooting star, bearish engulfing, and dark cloud cover.
You may also come across the bearish abandoned baby pattern and evening star.
Lest I forget, merging chart patterns with pivots is also a good way to trade.
You may also find formations like rising wedges, falling wedges, broadening wedges, symmetrical triangles, and flags.
Volatility and Pivot Trading
Pivot points can tell you how volatile the market was the previous day.
The range between the levels can be narrow or wide.
A narrow range hints the previous day’s volatility was low. While a wide range shows the previous day’s volatility was high.
This image shows an example of a day’s low volatility reflected as a narrow range the next day.
What can you do with this info?
Now it’s possible that the previous day’s volatility might run into the next day.
And as such, price will tend to fluctuate between a short or long-range.
Best Pivot Point Settings
The best pivot point settings are:
- Enable pivots for three timeframes.
- Enable fewer pivot lines.
- Change the pivot level colors.
- Enable pivot point moving average.
Let’s briefly talk about these.
1. Enable Pivots for Three Timeframes:
The pivots timeframe include daily, weekly, monthly, quarterly, and biannually.
You may not have to enable all of these at a time.
A swing trader needs majorly needs the first three timeframes.
However, if you want to take your analysis to the next level, you may want to check out quarterly levels that could serve as future support and resistance.
2. Enable Fibonacci Pivot Points:
What if you could mark out Fibonacci levels without using the actual tool meant for this purpose?
I’m sure that would be great.
Now you use Fibonacci pivot points instead of the traditional settings.
All you have to do is navigate to the indicator’s settings and change ‘Traditional’ to ‘Fibonacci’.
These levels won’t be far from the traditional pivot lines.
Check it out and try to spot the difference.
You might be able to get support and resistance zones using both pivot types.
3. Enable Fewer Pivot Lines:
The fewer the number of lines on your chart, the better.
That’s why you may have to reduce the number of lines provided by Pivot Point Standard.
By default, the indicator shows levels from the past 15 days.
You may not really need so much data. Hence, reduce the days to three or four.
I mostly use three just to see the bullish or bearish trend from the previous days.
4. Change the Pivot Level Colors:
The pivot levels on TradingView have a default orange color.
And this same color across different levels could make it a bit hard to differentiate one level from the other.
Nonetheless, that could change if you use different colors for each level.
This change can be made by going to the pivot settings.
You can modify the colors for P, S1/S2/S3, and R1/R2/R3 levels.
5. Enable Pivot Moving Average:
Did you know there’s a moving average specifically designed for pivot trading?
Because there is!
You could also make use of these averages to spot entry and exit areas.
Crossovers of these moving averages tell you to go long or short.
Let’s say the short-term moving average goes above the long-term moving average. This is a bullish signal to go long.
However, you’ll also ensure price is around the support of P, R1, R2, etc.
A bearish crossover is when the short-term moving average goes below the long-term moving average.
You could then wait for price to break below P or CPR, S1, S2, etc. before making your short entry.
It’s also worth noting that price may retest or pull back to the moving average which gives you good entry positions.
The moving average can be enabled in the Indicators section of TradingView.
Simply search for PPMA.
You can choose the first or second result returned.
The first PPMA is a single moving average which you can trade by waiting for a retest to the PPMA.
The second offers two moving averages whose bullish or bearish crossovers can be used.
Pivot Point Swing Trading Examples
Here are some pivot point swing trading examples.
Example 1: Swing Trading with Pivot and Candlesticks
Bullish and bearish candlesticks at pivot levels can serve as an entry and exit signal.
Check the resistance and support levels on the Bitcoin/USDT 15 minutes chart below.
What candles can you see?
There’s the piercing pattern, dark cloud cover, and evening doji star.
A reversal was hinted at by the rounding top of the candles.
Example 2: Swing Trading with Pivot and Chart Patterns
The BTC/USDT 15-minute chart below can be traded in one of two ways.
The first is longing at the current region and targeting ‘Take Profit 1.’
That target coincides with the minor highs in the range and even the lows of CPR.
A stop can be placed below P in case there’s a downward breakout.
‘Take Profit 2‘ coincides with the channel line of the rising channel.
If price closes above ‘Take profit 1,’ it could advance to the line.
The same chart can be traded by waiting for a breach of the pattern’s trendline.
Price has already failed to advance to the channel line on two attempts thereby creating lower highs.
The entire setup can be called a head and shoulders pattern.
If the internal range is not broken, then price will close below the diagonal trendline or neckline.
Now you won’t make a short entry immediately since the region is close to P.
You’d wait for a candle close below P or even CPR’s support before making an entry.
How did the trade play out? There was a breach of the neckline and P on the next day’s pivot.
And this aligns with the forecast in the image above.
The chart below is of a rising broadening wedge.
You could’ve traded the levels within the wedge.
Another way to take advantage of the pattern would’ve been to wait for a breakout.
Here, the trendline break coincides with a breach of P. And this confirms you take a short.
You can place a stop above the previous high and then set a target.
Your target or price objective can be gotten from transposing the height of the pattern.
Frequently Asked Questions
Here are answers to some frequently asked questions.
1. Is Pivot Point Good for Trading?
Yes, pivot point is good for trading.
The indicator makes it easier to draw support and resistance levels even if you’re new to trading.
You can merge these levels with candlestick analysis to get the best entries and exits.
2. Best Book on Pivot Point Trading:
According to Google’s recommendation, the best books on Pivot trading are:
- Candlestick and Pivot Point Trading Triggers: Setups for Stock, Forex, and Futures markets by John L. Person.
- Secrets of a Pivot Boss: Revealing Proven Methods for Profiting in the Market by Franklin O. Ochoa.
These are pivot point trading book PDFs.
But if you’re a video kind of guy or chick, you may want to check Udemy for some courses on this topic.
3. What Trading Platforms Automatically Calculate Pivot Points?
TradingView automatically calculates pivot points for you.
All you have to do is enable the indicator and then the levels will be displayed.
You can trade directly from this interface which makes it even better.
4. Which Pivot Points to Use for Trading Futures?
Futures trading requires that you get in and out of the market fast.
And that is why auto pivot on lower timeframes is ideal to use.
You can set these levels up on the 3m or 5m timeframe.
It’s worth noting that you’ll have to use 15m to confirm breaches of support and resistance levels.
Weekly pivot points for swing trading cryptos will improve your win rate.
These levels are held in high esteem by other traders.
Hence, reversals have a high chance of occurring on them.
The indicator can be used on Bitcoin, Ethereum, Matic, etc, and any crypto chart of your choice.
Try out the steps to day trading with pivot points and price action outlined in this guide.
Also, let me know in the comment section if you have queries or concerns.