Game-Changing Trading Strategy | How To Day Trade Stocks, ETFs & CFDs With Pivot Points

TL;DR

This video discusses a trading strategy that utilizes gaps and pivot points to trade stocks during the opening session.

Transcript

Hey guys, here’s a fun fact about pivot points: the market trades to the central pivot point around 60% of time. This means that every day, there’s a chance of 60% that the market will reach the main pivot point. To me, that’s a pretty good probability, compared to the 50% odds of the market going up or down. But what if we add the opening gaps int... Read More

Key Insights

• 🥺 The central pivot point has a magnetic effect on price and can lead to a high percentage fill of the gap being traded.
• 📣 There are four types of gaps in trading, each with its own characteristics and likelihood of being filled.
• 😥 The placement of the central pivot point and additional pivot confirmation levels can provide barriers or support for the gap to be filled.
• 📣 The size of the gap and the trend in the market can affect the probability of the gap being filled.

Questions & Answers

Q: How can pivot points be used in trading?

Pivot points serve as powerful support and resistance levels. By using the central pivot point and S1 and R1 levels, traders can focus on bullish or bearish trends and look for trading opportunities accordingly.

Q: What are the four types of gaps in trading?

The four types of gaps are common gaps, breakaway gaps, exhaustion gaps, and runaway gaps. Each gap type has different characteristics and can provide trading opportunities depending on the market conditions.

Q: How can the trading strategy be applied to specific stocks?

The strategy involves looking for gaps at the open and using pivot points as reference levels. Traders can analyze the stock's price action and previous day's closing price to determine the probability of the gap being filled and trade accordingly.

Q: What factors should traders consider when trading this strategy?

Traders should consider the size of the gap, the trend in the market, and additional pivot confirmation at S1 and R1 levels. Large gaps may be harder to fill, and a established trend can influence the outcome of the trade.

Summary & Key Takeaways

• The market trades to the central pivot point around 60% of the time, making it a good probability for trading.

• A gap at the open indicates a change in market sentiment and can be used to trade potential breakout moves or fill gaps.

• There are four types of gaps: common, breakaway, exhaustion, and runaway, each with its own characteristics.