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Market Structure - Swings and pivots

Price action trading part 5 Market structure - swings and pivot

Swings and pivots are basic units of market structure. Pivots are joining points of two swings.

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First level pivot

Pivot high

When middle candle forms a higher high than previous candle and candle after that, its called pivot high.

Pivot low

When middle candel forms a lower low than previous candle and candle after that, its called pivot low. 

These points are very common in charts. They sometimes can be major turning point in charts. But since they are very common, they cant be considered that much significant.

 


Second level pivot

In second level pivots we can find two candles on either side of the middle candle. If middle candle forms a higher high, its second level pivot high. If it forms lower low , its second level pivot low.

Third level pivot 

In this case, there will be three candles on either side of middle candle. Other conditions are same.

Pivots represent some major reversal points in charts. As level increases, significance of these points also increases. 

Pivots also helps us to identify higher highs, higher lows, lower lows and lower highs thus helping to analyse market structure.

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