Crypto Academy Season 2: Week 8 – Pivot Points – by @stream4u

Pivot Points

Pivot point is one of the very popular and top technical analysis techniques that has proven to be very beneficial in cryptocurrency trading. Pivot point is one of the many technical indicators that is used for determining and predicting support and resistance levels, price range forecasting, pin-pointing tops and bottoms on a chart.. We all know the importance of technical analysis when it comes to trading any cryptocurrency asset, and the pivot point along with other technical indicators like the MACD, moving average, volume, are great indictors that are very valuable as far as prediction in the market is concerned.

The Pivot Points indicator is simply a technical indicator that makes use of the normal price actions like the highs, lows and close from the day before to generate the base reference points. The pivot point indicator can also be called a leading indicator and it is based on past price actions. Pivot Points indicator plots the support and resistance points away from the main pivot point which is usually labelled as P. The pivot point indicator being a very popular indicator used in technical analysis and price range forecasting, has a lot of benefits. It can help cryptocurrency traders figure out the best points to enter or exit a trade, and aside from that, it can help traders know where to set stop loss. On the Pivot Points indicator, when support and resistance levels is above the central pivot, then the market is bullish and when the support and resistance levels is below the central pivot, the market is bearish.

Details about Pivot Point Levels

The Support level is simply a term used in technical analysis. On a cryptocurrency price chart, the support level shows the level in which the price of an asset stops after a fall in price and reverses upwards and rises. That price point where the asset bounces off and reverses upwards after a fall in price is known as the support level. Let’s take for example, The price of LTC is moving in a downward direction and then it hits a level at $200 and stops and reverses and rises into an upward direction, the $200 price point is the support level of LTC. As the market continues to move in either direction, new support levels will be created.

The Resistance level is simply a term used in technical analysis. There is nothing more to resistance level that just the exact opposite of support level. If support level is the floor, then resistance level is the roof. That is how I see it. On a cryptocurrency price chart, the resistance level shows the level in which the price of an asset stops after a rise in price and reverses downwards and falls. That price point where the asset bounces off and reverses downwards after a rise in price is known as the resistance level. Let’s take for example, the price of LTC is moving in an upwards direction and then it hits a level at $350 and stops and reverses and falls into a downward direction, the $350 price point is the resistance level of LTC on the chart. As the market continues to move in either direction, new resistance levels will be created.

Pivot Point Levels

Center Рivоt Роint or Main Pivot Point is simply the center point on the chart. Using the pivot point indicar, the center pivot or main pivot is usually labelled as P. When support and resistance levels is above the central pivot, then the market is bullish and when the support and resistance levels is below the central pivot, the market is bearish.

S1 is the first support level, it simply the first support level that is above the center pivot P which signals an uptrend movement.
S2 is the second support level, it is simply the second support level that is below the first support level S1.
S3 is the third support level, it is simply the third support level that is below the first support level S1 and second support level S2.

R1 is the first resistance level, it is the first resistance level that is above the center or main pivot point P.
R2 is the second resistance level, it is the second resistance level that is above the first resistance level R1.
R3 is the third resistance level, it is the third resistance level that is above the second resistance level R2 and third resistance level R3.

Pivot Point Calculation and R1 R2 S1 S2 Pivot Levels Calculation

Pivot Point - The pivot point calculation is simply the sum of the high, low and close divided by 3. This calculation forms the basis for the other pivot point analysis calculations. The pivot point calculation formula is P = (H + L + C) / 3
P – Pivot point, H – High, L – Low, C – Close

S1 – the first support level calculation is simply the pivot number multiplied by 2 and then subtracted by the High. The S1 calculation formula is S1 = (P x 2) – H
S2 – the second support level calculation is simply the pivot number subtracted from the high and then added to the low. The S2 calculation formula is S2 = (P - H) + L

R1 – the first resistance level calculation is simply the pivot number multiplied by 2 and then subtracted by the Low. The R1 calculation formula is R1 = (P x 2) – L
R2 – the second resistance level calculation is simply the pivot number added to the high and then subtracted by the low. The R2 calculation formula is R2 = (P + H) – L

How to Apply Pivot Point on Chart

Applying pivot point on a cryptocurrency pricechart is really a simple process and only requires a few steps. I will be applying the pivot point indicator on ENJ/USDT pair on https://www.tradingview.com
Visit the tradingview website and signup. After signing up, click on the symbol search or asset pair tab and select the asset pair of your choice. I will be using the ENJ/USDT pair on binance.

After choosing your asset pair, it is time to add the pivot point indicator on the chart. Click on indicators (fx) at the top

On the indicators search box, search for the pivot point indicator by typing pivot point into the search box

A list of different pivot point indicators will pop up. Choose the pivot point standard indicator to apply on the chart

Click on it to apply the pivot point indicator on your chart. Close the dialogue box to view and start analyzing with the pivot point indicator on the chart.

How Pivot Points Work

The Pivot Point indicator is works by determining the different support levels and resistance levels on a price chart. The pivot point indicator is based on past price actions like high, low, and close. Pivot points indicator plots the support and resistance points away from the main pivot point which is usually labelled as P. When we look at the pivot point indicator on a price chart of any cryptocurrency asset, we can see the different support and resistance levels at different intervals that are either above or below the center pivot.

The pivot point indicator is great for signaling the market trend. On the ENJ/USDT chart, we can see that the prices are below the center or main pivot point which signals a bearish trend. The prices are having a hard time reaching the first resistance level which is a big downtrend sign. If the prices are above the center or main pivot point, then the market is in an uptrend. The pivot point indicator shows the different support and resistance levels. On the ENJ/USDT chart, we can see the different support levels below the center or main pivot point and the different resistance levels above the center or main pivot point. When the price reverses and falls from a resistance level, it is a good exit signal. When the price breaks out and goes above a resistance level, it is a good entry signal. Also, when the price reverses and rises from a support level, it is a good entry signal with a stop loss.

Pivot Point Reverse Trading

In the pivot point reserve trading, after an uptrend movement in the market, the close becomes lower than the past low with the highest high. After a downtrend movement in the market, the close is becomes higher than the past high with the lowest low. Simply put, when the prices reverses either upwards or downwards, then it can either be a sell or a buy signal. In an uptrend movement, when the price reverses and moves downward, then it is a good sell signal. In a downtrend movement, when the price reverses and moves upwards, then it can be a good buy signal.

What could be a common Mistakes in Trading with Pivot Points

• A trader not doing sentimental analysis and relying on only technical analysis
• A trader has no idea supply and demand works and how it affects prices of cryptocurrency assets
• A trader relying too much on pivot points indicator and not making use of other indicators to verify
• A trader not understanding price actions
• Not carefully paying attention to the different support and resistance levels
• Not having a clear trading strategy when using the pivot point indicator

What could be the reasons For Pivot Points is Good.(Pros/Advantages)

• The pivot point indicator along side other indicators is very valuable and can help traders reduce risk or make more profit.
• Another advantage of the pivot point is that it can signal where to set stop loss or take profit
• Another advantage of Pivot Points is that it can help a trader know the entry and exit points when trading.
• Another advantage of the Pivot Points is that it can signal the trend of the market and the trend direction the market is going
• One of the pros or advantages of Pivot Points is that it helps traders determine support and resistance levels which is very valuable in price forecasting.
• Another advantage of pivot point is that it is straight forward and simple to use.

Apply the Pivot Points indicator in the Today chart

The trading pair I will be using is ENJ/USDT trading pair on binance. Looking at the 15mins price chart of ENJ/USDT, the price was above the center or main pivot blue line before entering a corrective phase and went below the center or main pivot line. The price created the first support level S1 before break out from the first support level and creating the second support level. The price corrected for a little while before creating the third support level S3. The market is moving sideways in the 15mins chart with price fluctuating upwards and downwards. However, the trend is still in a downtrend as the price still below the center or main pivot point.

The price is having a hard time breaking above the previous support level S2 price at $1.4698. The price is still below the center or main pivot point which indicates a bearish sign. With the market moving sideways, there is a big possibility that we could see a break out which could break above the center pivot point, which could see the price hit the first resistance level R1 price at $1.6760. Also, there is a big possibility that the price could fall below the first support level price at $1.3660.

Weekly Price Forecast For Crypto Coin: ATOM/USDT

Cosmos ATOM and Why I Choose ATOM

ATOM is the token of the cosmos blockchain. Cosmos blockchain is a decentralized blockchain platform that works by allowing various blockchains to exchange data between them. Cosmos blockchain is simply a blockchain of independent parallel blockchains that is decentralized with the ability to scale and connect to each other. One of the core fundamentals of the Cosmos blockchain is that it focuses on security, scalability, and cross-chain bridges.

Some Key Features of Cosmos ATOM

• Scalability
• Security
• Interoperability
• Decentralization
• Cross-chain bridges
• Customizable
• Internet of blockchains

ATOM

ATOM is the native token of the cosmos blockchain network. The main reason why I chose ATOM is that it is a very popular cryptocurrency that is creating innovative solutions in the crypto space. Also, ATOM has so many use paying transaction fees on the network and also allows for consensus participation in the network.

Cosmos ATOM currently has a marketcap of $3,138,087,767 and on number 38 on coinmarketcap, with current price of over $14. ATOM has a circulating supply of 210,767,262.76 ATOM, fully diluted marketcap of $3,984,987,720, total supply of 268,426,508 ATOM. ATOM can be bought and traded on a number of exchanges most especially the top crypto exchanges such as coinbase pro, binance, huobi, kucoin, bittrex, kraken, gate.io, OKEx, poloniex etc.

In my opinion, Cosmos ATOM is one of the top and popular blockchain platforms currently which makes it a a very good choice for trading because it has a lot of liquidity. The fundamentals is solid and for me, this is great to focus on technical analysis. After doing my fundamental and sentimental analysis, ATOM is a good project with a lot of potential to increase in price.

Technical Analysis - Price Forecasting Using ATOM/USDT pair

I will be predicting the price of ATOM focusing only on technical analysis. tradingview and some few indicators will be used for my technical analysis. The trading pair I will be using is the ATOM/USDT pair on binance. I will be focusing on the support and resistance levels using the pivot point indicator, I will also be using the RSI indicator.

The current price of ATOM is $14.90, the last 7days price of ATOM is $40. The 24hr high was $11.64, the 24hr low was $14.82. The all-time high in the last 29days was $31.70. Looking at the past price data, we can see that ATOM went down almost 54% from its all-time high.

Looking at ATOM/USDT chart on tradingview with the pivot point indicator, you can see the support and resistance levels. On the current daily candle chart, ATOM has wedged a support level at about $11.281 and a resistance level of $16.716. However, the price is below the center or main pivot point which is downtrend or bearish sign. In my opinion, there is a huge possibility that ATOM price would still decrease and fall past the previous. In the recent daily candle, the price is above the first support level1 but is still below the center or main pivot point.

Looking at the ATOM/USDT chart using the higher high indicator, you can see the various highs, lows, higher-highs, higher-lows. On the current daily candle chart, ATOM has signaled a lower-high which is indicates a downtrend. Using this, my forecast for the price of ATOM in the next week is between the ranges of $18.65 and $20.00

Possible low level and the high level for the next 1 week?

Looking at my ATOM/USDT pair chart and after my technical analysis, My prediction on the next low of ATOM is $12.24 and the next high of ATOM could breakout at $24.25

Conclusion

Technical analysis is really important when it comes to price forecasting of any crypto asset and trading any cryptocurrency. For me, technical analysis indicators are crucial because it helps to determine the market trend and to know when to enter and exit a trade. Pivot point is one of the many technical indicators that is used for determining and predicting support and resistance levels, price range forecasting, pin-pointing tops and bottoms on a chart… Pivot point indicator along with other technical indicators like the MACD, moving average, volume, are great indictors that are very valuable as far as prediction in the market is concerned.

Task post for @stream4u