Trade Bitcoin Trading

How to Day Trade Bitcoin with Pivot Points

Pivot Points are used by traders to find support and resistance areas based on the previous day's Bitcoin prices.

The Pivot points indicators uses the previous day's high, low and closing price to project support and resistance levels for future Bitcoin prices.

Pivot Points offer an indication of where the critical support and resistance boundaries are situated. When a trader applies this indicator to the BTCUSD chart, the corresponding resistance and support levels for Bitcoin prices become charted on the BTC USD Bitcoin chart. Bitcoin traders utilize these support and resistance levels to estimate market peaks, troughs, and points where the market trend is likely to reverse or pull back.

Daily Pivot Points are calculated from the previous day's high, low and closing prices. The Pivot Points is shown below.

How Do You Trade Bitcoin Using Pivot Points Indicator? - BTCUSD Trading Pivot Points Indicator Analysis

Pivot Points Indicator - Bitcoin Trading

Analysis of Pivots

The center pivot point is primarily used to figure out the market trend.

The other support & resistance areas are also important in calculating levels that can generate substantial market movements.

Pivot Points Indicator can be used in Two Ways:

The first method is for determining the general Bitcoin price trend:

  • If the pivot point is broken in an upward trend movement, then the market is bullish
  • If the pivot point is broken in a downward trend movement, then the market is bearish

However, Bitcoin traders should note that pivot points are short term trend indicators, helpful only for one day until they need to be recalculated.

The second method is to use these pivot points to enter & exit trades. This btcusd indicator is very useful when it comes to calculating the areas that are likely to cause price moves and traders can then use these points to figure out whether to open a trade or to close a trade.

Trading signals generated using pivot points indicator should also be used together with another indicator so as to confirm these signals.

Other indicators which can be combined with Pivot Point indicator are Moving Averages, MACD and RSI.

The illustration presented below shows the Moving Average which can be combined with pivot point indicator to confirm the signals generated by the pivot point indicator.

How to Day Trade Bitcoin with Pivot Points - How Do You Trade Bitcoin with MAs Moving Averages and Pivot Points BTCUSD Indicator?

MA Indicator - MA Cross over Strategy

These MAs can be used to confirm the direction of the continuing price trend or they also can be used to confirm a price reversal setup. Once a signal is generated by the pivot point indicator then a trader will use the moving average indicator to confirm the trading signal. If both indicators give a signal in the same direction then one can open a trade - if not a btc usd trader should wait until the signal generated by the pivot point indicator is confirmed by the Moving Average crossover system shown above.

Pivot Points Trading Setups

Trend Continuation Trading: The central pivot point is helpful in figuring out the overall trending direction of the prices of BTCUSD (BTCUSD). Trades are only opened in direction of the ruling trend. A buy signal occurs only when the market is above the central pivot point & a sell trading signal happens only when the market is below the central pivot point.

Price Breakouts Trading: A bullish signal forms when the market breaks up through the central pivot point or one of the resistance levels (commonly Resistance Level 1). A bearish signal forms when the market breaks down through the central pivot point or one of the support levels (often Support Zone 1).

Trend Reversals:

  • A buy signal forms when market price moves towards a support zone, gets very close to this point, touches this point, or moves only slightly/a little through this point, & then reverses and moves & heads back in the opposite trend upward direction.
  • A sell signal forms when market price moves towards a resistance area, gets very close to this point, touches this point, or moves only slightly/a little through this point, & then reverses and moves back in the opposite trend downwards direction.

Stop loss and/or Take Profit Values Determined by Pivot Point Support/Resistance Levels: Pivot point technical indicator is helpful in figuring out suitable stop loss order and/or takeprofit levels. For example illustration, if trading a buy long buy signal generated/derived by a break-out above the Resistance 1, it may be sensible to position a stop loss just below the central pivot point or just below.

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