Trade Bitcoin Trading

How to Day Trade Bitcoin with Pivot Points

Pivot points help traders determine support and resistance zones using calculations based on previous Bitcoin price action.

Pivot point indicators use yesterday's high, low, and close 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 mathematically derived using the preceding day's peak price, trough price, and closing price, with the result displayed below.

Bitcoin Pivot Points Trading - Analyze BTCUSD with Pivot Points

Pivot Points Indicator - Bitcoin Trading

Analysis of Pivots

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

Other significant support and resistance areas play an essential role in identifying substantial market movement levels.

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

But, Bitcoin traders must remember that pivot points show short term trends, and they only work for one day before needing to be updated.

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 from the pivot points tool should also be used with another tool to make sure that the signals are correct.

Other analytical tools that can be effectively paired with the Pivot Point indicator include Moving Averages, MACD, and RSI.

The illustration below depicts the Moving Average, which may be used in conjunction with the pivot point indicator to validate the signals it produces.

Day Trade Bitcoin with Pivot Points - Trade BTCUSD Using Moving Averages and Pivots

MA Indicator - MA Cross over Strategy

These MAs can be utilized to either confirm the direction of an ongoing price trend or to substantiate the setup for a potential price reversal. Only after the pivot point indicator furnishes a signal will a trader proceed to use the moving average indicator for confirmation of that trade signal. If both indicators concur on the direction, a trade can be initiated: otherwise, a btc usd trader ought to await confirmation from the Moving Average crossover system, as previously demonstrated, before acting on the pivot point indicator's signal.

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 Breakout Trading: A bullish signal arises when the market surpasses the central pivot point or a resistance level (often Resistance Level 1). Conversely, a bearish signal occurs when the market declines below the central pivot point or one of the support levels (usually 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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