Pivot Point Reversal

Pivot Point

The pivot point focuses on the closing price relative to the bar with the highest High (or lowest Low).

After an up-trend:

  • The close is below the Low of the day with the highest High.

After a down-trend:

  • The close is above the High of the day with the lowest Low.

Complex Pivot Point

Complex pivot points sometimes occur, where it may take several days to form a pivot.

Complex Pivot Pattern

Remember:

The signals are most reliable if they occur after a strong trend. If the trend is weak, so is the signal.

Colin Twiggs

Author: Colin Twiggs is a former investment banker with over 30 years experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary newsletter.

Colin also writes The Patient Investor newsletter which focuses on the global economic outlook and key macro trends.

In addition, he founded PVT Capital (AFSL No. 546090) which offers investment strategy and advice to wholesale clients.