EDUCATION: Pivot Levels

Hello, dear subscribers!
Today we are going to talk about one of the most useful indicators in cryptotrading - pivot levels(points). We have already considered the lagging and leading indicators and decided that the second one is the most valuable.

Definition
Pivot levels is the leading indicator which define the potential pivot levels for the next trading period (in our example - month). The formulas for the levels calculation you can see on the picture. It is known that when the price is up of the central pivot - the market is in the uptrend, if the opposite - in the downtrend.

How to trade with pivot levels
It is great to use pivot level with some lagging indicator to confirm the entry points. This indicator can give the information about levels when the price can bounce off or reverse. You can see the points with small red arrows where the price bounced off pivot levels and went down after it - this points can be used for the short position. The green arrows demonstrate the potential price growth points. But there are also a lot of breakpoints (blue circles), to avoid the trade execution next to these point you need to use some confirmation with lagging indicator.

Summary
1)Define the trend direction
2)Open short if downtrend, long - if uptrend
3)Define the entry points next to pivots
4)Find the confirmation with some lagging indicator to avoid the pivot break points
5)Execute the trade, set the sloploss level

Good luck!