In this article we will be discussing about how to use pivot point strategy to enter and exit in the day trading. Lets get started:
Rule 1: Enter the trade only when the stock breaks the R1 / S1 levels, when the next candles open.
Rule 2: Don’t enter the trade even if stock breaks the R1/S1 level after 1.30 pm.
Rule 3: Target 1: 1.5 risk reward ratio. This means my reward has to less then my risk.
A proper risk reward is a key to consistent profit in the market. Even if you have 50% success trades in a month with this risk reward at the end of the month you will be a profitable trader.
Rule 4: Don’t enter the trade if there are huge wicks in the candles breaking the resistance level.
Rule 5: Pick the stocks as per nifty 50 sentiments. If nifty is bullish pick the stocks which break R1 levels and if its sentiment is bearish then we have to select the stock which broke S1 level.
Following these rules will help you increase your success rate and save you from the market traps and false breakouts.