How To Trade Nifty Future Using Pivot Point Trading System (Part-I)

In this lesson we shall learn how to trade Nifty future using Pivot Points. Pivot points are support and resistance levels that are calculated using the open, high, low, and close of the previous trading day. The pivot points include the pivot point itself and six full support and resistance points and are collectively referred to as the pivot points.

The calculation for a pivot point is shown below:

• Pivot point (PP) = (High + Low + Close) / 3
• Support and resistance levels are then calculated off the pivot point like so:
• First level support and resistance:
• First support (S1) = (2*PP) – High
• First resistance (R1) = (2*PP) – Low
• Second level of support and resistance:
• Second support (S2) = PP – (High – Low)
• Second resistance (R2) = PP + (High - Low)

Don’t worry you don’t have to perform these calculations yourself. I shall provide you with the pivot points of Nifty future everyday.

Here are some easy to memorize tips that will help you to make smart pivot point trading decisions in Nifty future.

• If price at PP, watch for a move back to R1 or S1.
• If price is at R1, expect a move to R2 or back towards PP.
• If price is at S1, expect a move to S2 or back towards PP.
• If price is at R2, expect a move to R3 or back towards R1.
• If price is at S2, expect a move to S3 or back towards S1.
• If there is no significant news to influence the market, price will usually move from P to S1 or R1.
• If there is significant news to influence the market price may go straight through R1 or S1 and reach R2 or S2 and even R3 or S3.
• R3 and S3 are a good indication for the maximum range for extremely volatile days but can be exceeded occasionally.
• Pivot lines work well in sideways markets as prices will most likely range between the R1 and S1 lines.
• In a strong trend, price will blow through a pivot line and keep going.

So to end, Nifty future important levels for tomorrow, 13th August:
R3 - 4636, R2 - 4555, R1 - 4514, Pivot Point - 4432, S1 - 4391, S2 - 4310, S3 - 4268

Happy trading using the pivot points. I need your comments and feedbacks on tomorrow's trades using this system, so that we can take this discussion to further heights. Cheers!!

Special Note - I conduct an one day web-workshop held on every Saturdays on "TRADING FOR A LIVING" where I discuss some of the high probability trade setups for intraday or swing trading in Index futures or stocks. For registration and enquiry about the workshop please see more in this page or do call me at 9432883838 or mail me at stockmaniacs@ymail.com.