Break of Structure (BoS) and Change of Character (CHoCH) Trading Strategy
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Support and Resistance TradingView Indicator: The Pivot Point Trading Strategy
Last Updated: March 25, 2025
Key Takeaways
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The Pivot Points High and Low indicator helps identify significant support and resistance levels based on historical price pivots
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Increasing the "Pivot Time Back" and "Pivot Time Forward" values to around 20 filters out minor fluctuations and focuses on significant market turning points
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Clusters of pivot highs or pivot lows can indicate strong zones where price may react, providing potential trading opportunities
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This indicator can be used to plan entries and exits, set strategic stop-losses, and identify potential price reversal zones in any market and timeframe
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Combining the Pivot Points indicator with other technical tools like moving averages or RSI can create a more robust trading strategy with higher probability setups
Understanding support and resistance levels is crucial for any trader looking to trade the markets effectively. One powerful tool that can help identify these levels is the Pivot Points High and Low indicator on TradingView. In this guide, we'll walk you through setting up this indicator, customizing its settings, and using it to enhance your trading strategy potentially.
Setting Up a Clean Chart in TradingView
To begin, open up a clean chart on TradingView. You can use this indicator on virtually any timeframe, but for this article, we'll look at Bitcoin on the daily timeframe. If you don't have access to TradingView yet, it's a highly recommended platform for chart analysis.
Adding the Pivot Points High and Low Indicator
Access the Indicators Tab: Click on the "Indicators" tab at the top of the TradingView interface.
Search for the Indicator: In the search bar, type "Pivot Points High and Low".
Select the Correct Indicator: You'll see multiple options, but the one we're interested in is simply called "Pivot Points High and Low".
Once added, you'll notice that multiple high and low points appear on your chart. These are the pivot highs and pivot lows that we'll be using to identify support and resistance levels.
The Pivot Points High Low Indicator in TradingView
Customizing the Indicator Settings
The default settings might display too many pivot points, making the chart look cluttered. To make the the pivot points more significant and the indicator potentially more effective:
Access Indicator Settings: Click on the gear icon next to the indicator's name.
Adjust the Style:
Go to the "Style" tab.
Depending on your background on TradingView, you might want to change the colors of the pivot highs and pivot lows to something more visible.
Modify the Inputs:
Navigate to the "Inputs" tab.
Increase the "Pivot Time Back" and "Pivot Time Forward" values to make the pivot points more significant. For instance, setting both to 20 means that a pivot high or low will only be marked if it stands out among 20 candles to the left and right.
By increasing these values, you're filtering out minor fluctuations and focusing on significant highs and lows, which are more relevant for identifying key support and resistance levels.
Pivot Points High Low Indicator Settings
Understanding Pivot Points
A pivot point, in trading terms, is a significant high or low point on the chart. A pivot high is a candlestick that has lower highs on both the left and right sides, while a pivot low has higher lows on both sides. By identifying these points, traders can spot potential significant areas where the price may be more likely to reverse or see other important price action signals.
Identifying Support and Resistance Levels
With the pivot points plotted on your chart, you can start identifying areas where multiple pivot highs or lows cluster together. These clusters can often indicate strong support or resistance levels.
Draw Support Zones: Look for areas with multiple pivot lows close to each other. Use the rectangle tool to draw a zone encompassing these points.
Draw Resistance Zones: Similarly, identify areas with multiple pivot highs and draw a zone around them.
These zones represent areas where the price has historically had difficulty moving past, making them more likely to be significant for future price action and market structure analysis.
Support and Resistance Indicator in TradingView
Applying the Pivot Point Trading Strategy
Using the support and resistance levels identified with the pivot points, you can enhance your trading strategy:
Plan Entries and Exits: Consider entering trades when the price approaches these key levels. For instance, you might look to buy when the price reaches a strong support zone or sell when it hits a resistance zone.
Set Stop Losses: Place stop-loss orders just beyond these levels to manage risk effectively.
Combine with Other Indicators: For a more robust strategy, consider combining pivot points with other indicators like moving averages or RSI.
TradingView offers a wide range of indicators that you can use alongside pivot points to strengthen your analysis.
Practical Example
Suppose you're analyzing Bitcoin on the daily chart:
Set the Pivot Lengths: In the indicator settings, set both the pivot high and low lengths to 20.
Identify Key Levels:
Notice a cluster of pivot lows around the $30,000 level, indicating strong support.
Identify pivot highs around the $40,000 level, suggesting strong resistance.
Plan Your Trade:
Consider buying if the price approaches $30,000, anticipating a bounce from support.
Plan to take profits or consider selling as the price nears $40,000.
By using the pivot points to identify these key levels, you can possibly make more informed trading decisions.
Benefits of Using the Pivot Points High and Low Indicator
Simplicity: The indicator is straightforward to use, even for beginners.
Visual Clarity: It provides clear visual cues on the chart, making it easier to spot significant levels.
Customizable: You can adjust the settings to focus on the most relevant pivot points for your trading style.
If you're not already using TradingView, it's an excellent platform that provides all the tools you need for effective chart analysis, including the Pivot Points High and Low indicator.
FAQ: Support and Resistance TradingView Indicator
FAQ
What is the difference between pivot points and regular support/resistance levels?
Pivot points are specific candlesticks or price bars that mark significant highs or lows in the market, having lower highs on both sides (for pivot highs) or higher lows on both sides (for pivot lows). Regular support and resistance levels can be drawn from any price area where the market has reacted multiple times. Pivot points are more systematic and objective, as they follow specific criteria for identification, while traditional support/resistance can sometimes be more subjective.
Can the Pivot Points High and Low indicator be used on all timeframes?
Yes, the Pivot Points High and Low indicator can be used effectively on any timeframe, from 1-minute charts to monthly charts. However, the significance of the pivot points increases with higher timeframes. For example, pivot points on a daily chart typically indicate stronger support/resistance levels than those on a 5-minute chart. You may need to adjust the "Pivot Time Back" and "Pivot Time Forward" settings based on your chosen timeframe.
How do I know which settings are optimal for the Pivot Points indicator?
The optimal settings for the Pivot Points indicator depend on your trading style, timeframe, and the specific market you're analyzing. As a general rule, start with the "Pivot Time Back" and "Pivot Time Forward" values set to 10-20 for daily charts. Increase these values for more significant pivot points (fewer but stronger signals) or decrease them for more frequent pivot points. The best approach is to backtest different settings on historical price data for your specific trading instrument to see which configuration would have provided the most reliable signals.
Can I use pivot points for automated trading strategies?
Yes, pivot points can be incorporated into automated trading strategies. You can program a trading bot to generate buy signals when price approaches a significant pivot low (support) and sell signals when it approaches a pivot high (resistance). However, because market conditions change, it's advisable to combine pivot point signals with other confirmatory indicators or filters. Many traders use pivot points as part of a rules-based system rather than as the sole trigger for automated trades.
How do pivot points compare to other support/resistance indicators like Fibonacci retracements?
Pivot points and Fibonacci retracements both identify potential support and resistance areas but use different methodologies. Pivot points are based on actual historical price action and identify specific swing highs and lows where the market has already reversed. Fibonacci retracements, on the other hand, are calculated based on mathematical ratios applied to a selected price movement. Many experienced traders use both tools in conjunction—pivot points can confirm Fibonacci levels, and when both align at a similar price area, it often indicates a stronger support/resistance zone with higher probability of price reaction.
QUIZ: Test Your Pivot Points High and Low Indicator Knowledge
Test Your Knowledge
Conclusion
Identifying support and resistance levels is a fundamental aspect of technical analysis. By using the Pivot Points High and Low indicator on TradingView, you can enhance your ability to spot these critical levels and improve your trading strategy. Remember to adjust the indicator settings to focus on significant pivot points and consider combining this tool with other indicators for even better results.
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