Why Pivot Points are important in Day Trading

1. Pivot meaning- Turnaround or reverse

2. It is nothing but Support/ Resistance
3. Purely derived by price
4. Purely Leading indicator
5. Used and trusted by Big players

Some Secrets of Pivot Points

1. Pivot Points (Daily/ Weekly/ monthly) are more powerful and act as good support and
resistance in the opening to mid-afternoon, less effective in late afternoon.
2. CPR is powerful throughout the day (most often).
3. Price is BULLISH as long as ABOVE CPR and BEARISH as long as BELOW CPR.
4. More WIDER the CPR, more difficult for price to penetrate, so wider CPR has more strength
than narrow width CPR (but not always).
5. If CPR is too narrow its easy for price to penetrate and narrow CPR has high chance of
trending days ( but not always)
6. Whenever CPR is wider, one can assume that such days could be range days (but not
always) where price moves from range to another throughout the day so one can play a
strategy accordingly.
7. Virgin CPR is one of the most powerful CPR (most of the time).
8. Nearest Virgin CPR is more powerful than if the same is far than 4-5 days.
9. Virgin CPR works as a good support/ resistance at opening session, not so powerful support/
resistance at mid to late afternoon.
10. If weekly/monthly pivots near to CPR then they are not much powerful. If weekly/ monthly
pivots are away from CPR then they are more powerful.
11. It is not a good idea to go long when CPR is just above the candle and not a good idea to
short if the CPR is just below the candle.
12. PDH/ PDL more important and works as a strong support/ resistance if price opened outside
its range (means gap up or gap down) compared to price opened within the previous day
range and then comes near PDH/ PDL.

How to prepare yourself and your chart before the market open

5 Min TF more ideal for Day Trading purpose

Preparing Yourself
1. Watch US Market close on previous night up/ down or flat.
2. Watch Asian Markets, is it trading in Green/ Red or mix.
3. Watch SGX nifty (up or down by how many points).
 Preparing Chart

1. Mark PDH/ PDL, Previous days turning points, on Current day (refer 5min TF)
2. Mark if any remarkable supply/ demand zone from previous few sessions (refer 15/30 min
TF) also mark if any virgin CPR in past few sessions.
3. Mark important previous Swing Highs and Lows and Gaps on daily TF (refer Daily TF)
4. Mark CDH and CDL because at these levels most of the retailers have their SL.
5. Have all the Pivots (Daily/ weekly/ monthly) and CPR on your chart.
6. If you trade on Index, then better have both Nifty and Bank nifty in one screen.

How to Plot CPR and Pivot on Trading view

Pivot:
Type>Pivot> under public library > CM_Pivots_M_W_D_4H-1H_ Filtered by Chris moody
Type> Pivot Range> under public library> Pivot Range Pivot Boss by Christian.d

15 Day Trading Patterns & Strategies

Opening
1. Open Drive (OD)
2. Open Drive Rejection (ODR)
3. Pivot Pressure Trade (PPT)
4. Evening Star
5. Morning Star
6. Virgin CPR Reversal

Opening to Mid Afternoon

7. Red Candle Retracement (RCR)
8. Green Candle Retracement (GCR)
9. Gap up Rejection

Mid to Late afternoon

10. CPR Breakout (CPR BO)
11. Gap down Rejection (Breakout)
12. M Reversal
13. W Reversal
14. Red Candle Breakout (RCBO)
15. Green Candle Breakout (GCBO)
Detailed Strategies are as follows:

1. Open Drive
a. Opening candle can be slightly gap up/ gap down candle or close above PDH or PDL
(preferably Pin bar or bullish candle).
b. If low of the candle touches PDH/ PDL then very high probability trade.
c. Ensure that there is no resistance overhead i.e. daily, weekly or monthly pivot or big
support or resistance.
d. Target should be 1:2 or nearest pivot or keep riding the trend with trailing SL.
e. If suppose first candle makes a pinbar but does not break the PDH and second candle
breaks then will wait for the price to retrace to PDH and then will take a trade.
f. Weekly and monthly pivots are more powerful than daily.

2. Open Drive Rejection

a. Open candle should be gap up or gap down candle (preferably pinbar or bullish candle).
b. If close of the first candle you see some resistance overhead (like daily, weekly or
monthly pivot or swing high/ low) then expect ODR pattern.
c. Entry: on short side once first candle low broken.
d. SL: Should be above pivot ore resistance.
e. Target: could be 1:2 or PDH or current day CPR.
f. It is more powerful if happens till 4th or 5th candle. Later loses its relevance.
g. You also get opportunity to short again when the support of the low of first candle
becomes resistance and price comes to retest again.
h. ODR Is High Probability and works well most of the times in GAP UP than gap down.

3. Pivot Pressure Trade

a. At opening, first candle should make a pin bar or bullish/ bearish bar with low/ high of
candle at weekly/ monthly pivot/ CPR ( low of the candle should originate from pivot) or
b. Entry: First candle should be big bearish bar and then next bar is pin bar taking support
at weekly/ monthly pivot/CPR.
c. SL: below that pivot.
d. Target: can be 1: 1.
e. Generally happens on first day of the week.
f. Trend can continue in that direction after this happens.
g. It works best on Weekly, then monthly (for bullish side) and later CPR (generally for
Bearish side).
h. It generally has the tendency to touch the PDH/ PDL. SO can book profit at that place.
i. Good trade when both Nifty and Bank nifty shows same pattern or atleast the other one
is not facing resistance.

4. Evening Star
a. Gap up above PDH
b. Opening candle could be reversal pinbar or Bearish candle.
c. Entry: First candle or next candle should close below PDH.
d. SL: above PDH or above entry candle or above nearest pivot or 1ATR.
 e. Target: should be CPR or 1: 2 or more.
f. If price comes to retest the support, then there is another opportunity to go short.
g. Evening star pattern is much better to trade than morning star and market falls faster.

5. Morning Star
a. Gap down below PDL
b. Opening candle could be pinbar or Bullish candle.
c. First candle or next candle should close above PDL.
d. SL above PDL or below entry candle or below nearest pivot or 1ATR.
e. Target should be CPR or 1: 2 or more.

6. Virgin CPR Reversal

a. Previous day CPR should be virgin (means previous day price should not have touched or
pierced the CPR).
b. Short if next day price approach CPR or close near Virgin CPR at the opening.
c. Keep SL just above Upper CPR or 1 ATR.
d. Target can be current day CPR or 1: 2.
e. Avoid this pattern in the late afternoon.
f. Early morning appearance better on chart.

7. Red Candle Retracement

a. First 5min (opening) candle should be BIG RED candle.
b. First candle open to close around 3/4th of the candle preferably.
c. Take short trade when price retraces back to high of first 5min candle (take only first
retracement).
d. High probability trade if retracement happens in first 1-2 hours and high of the candle
and wide CPR at same level (candle inside wide CPR).
e. SL should be above CPR or 1ATR
f. Target can be 1: 2 or below first candle or the nearest pivot.
g. Such candles are created by Big players and their stop loss is above the candle or CPR.
Whenever price reaches that place, they will short it again to protect their SL.

8. Green Candle Retracement

a. First 5min (opening) candle should be BIG GREEN candle or bullish Pinbar cabdle.
b. Take long trade when price retraces back to the low of the first 5min candle (take only
first retracement.
c. High probability trade if retracement happens in first 1-2 hours and low of the candle
and wide CPR at same level (candle inside wide CPR).
d. SL should be below CPR or 1ATR
e. Target can be 1: 2 or below first candle or the nearest pivot.
f. Sometimes after the big green or pinbar the momentum continues in the same direction
on the upside. It generally happens when there is no immediate or near resistance
above and you keep waiting for a retracement.
g. So resistance above the big green candle is important.
h. It is not necessary to happen near CPR unlike RCR.
9. Gap up Rejection
a. Market should open huge gap up.
b. First candle should be bearish or reversal pinbar with its high touching to some pivot or
some big resistance.
c. SL should be 1% of the entry price or above the entry candle or above pivot resistance
d. Target should be PDH or 2ATR.
e. This is a gap filling strategy as market does not like gaps.
f. It works well in at late afternoon most of the times means for its retest if that happens.

10. CPR Breakout/ Breakdown

a. Market should make a consolidation around CPR.
b. Once it breaks out of CPR, with full body candle, (go long if breakout happens at UCPR
and go short it breakout happens at BCPR)
c. High probability trade if it happens in late afternoon.
d. SL should be above/ below other side of CPR or breakout candle or 1R
e. Target 2R or more.
f. If CPR is average size or slightly wider they are most often powerful.
g. Breakout from narrow CPR or very wide CPR is not that powerful.
h. If Nifty and Bank Nifty have CPRBO pattern at the same time very high probability.
i. Breakouts are very strong and can break everything (except a CPR specifically wide CPR).
So do not worry about any pivots present near the breakout.

11. Gap Down Rejection (Breakout)

a. Previous day (or day before) should be a bearish day or close at low of the day.
b. Current day should be Big Gap Down.
c. Watch price action near PDL. If it breaks, go long (mid to late afternoon only because
short seller need to square off their position in a hurry because market is about to
close).
d. Expect a big move after breakout.
e. SL should be 1% from entry price or below PDL or below breakout candle.
f. Target should be 2R or more.
g. It is not necessary that the gap should be filled not the same day itself. It can be filled on
the next morning and then with price action there can be a breakout of the gap level.

12. M Pattern Reversal

a. Day structure should be Trading range day.
b. Price should retrace back or near to high of the day after making high in the first one
hour.
c. Go short when price comes back to high of first hour.
d. SL should be 1% from high of first hour or above nearest pivot resistance.
e. Target 2R or previous swing low.

13. W Pattern Reversal

a. Opposite of M Pattern reversal.
b. Day structure should be Trading range day.
 c. Price should retrace back or near to low of the day after making low in the first one
hour.
d. Go long when price comes back to low of first hour.
e. SL should be 1% from high of first hour or above nearest pivot resistance.
f. Target 2R or previous swing high.

14. Red Candle Breakout

a. First 5 min (opening) candle should be Big RED candle.
b. Take long trade if price breaks out of the first 5min candle.
c. Red candle can be from previous day also which was not broken.
d. High probability Trade if breakout happening in opening (for previous day candle) or late
afternoon (for current day candle).
e. If red candle breakout happens in the early morning (for same day) then that day can be
a trend day.
f. If the breakout happens at CPR then better not to take the breakout because most
of the times it fails.

15. Green Candle Breakout

a. First 5 min (opening) candle should be Big GREEN candle.
b. Take short trade if price breaks down of the first 5min candle.
c. Green candle can be from previous day also which was not broken.
d. High probability Trade if break down happening in opening (for previous day candle) or
late afternoon (for current day candle).

How to trade opening in Nifty/ Bank Nifty

Some of the important locations and patterns for trading the opening

1. PDH/PDL
Not all PDH/PDL are important. If previous day was bullish or bearish mark PDH/ PDL, watch
for price action at opening to take that trade or if there was a big swing in mid to late
afternoon, mark those levels.
2. Evening Star
If first candle opens gap up and makes a bearish pinbar, go short once it closes below PDH,
Target CPR, SL-above PDH or above pinbar candle.
3. Morning Star
If first candle opens gap down and makes a bullish pinbar with low touching PDL, go long,
Target CPR, SL- below pinbar candle.
4. Open Drive
If first candle is pinbar and and closed above PDH, go long, ensure that no resistance nearby,
Target next nearest pivot, SL below PDH or below entry candle
5. ODR
If first candle is pinbar and if next 3-4 candle breaks first candle, go short, Target CPR or next
pivot, SL- high of first candle or high of reversal candle.
6. PPT
IF price opens at week/ monthly pivot and candle is pinbar or bullish or bearish candle with
its wick low touching weekly monthly pivot, go long or short on that candle.

Stop loss Method in Day Trading (5 methods)

1. ATR Method (14) -Use this method based on current ATR plus 10-15 points buffer (most
suitable for ATM options trade).
a. It works well in mid-afternoon trades (11 am to 1pm) when volatility is low and
works well for ATM options.
b. If you are buying/ selling ATM strike options, then see where is ATR level, for eg at
12pm if long with selling put , ATR at 8, so SL should be half of ATR i.e. 4plus 1 or 2
points buffer, so SL is 5. Therefore SL should be half of ATR plus small buffer.
c. It works most of the time but not everytime. Some SL hits even with this method.
2. Placing SL below or above important pivots like weekly/ monthly pivots (if there are
cluster of pivots or support/ resistance then place your SL below/ above last support/
resistance).
3. Placing above or below PDH/ PDL (works effectively in opening and less effective in
afternoon).
4. Placing above or below CPR (only is CPR is average and not very wide) if CPR is very wide
then SL above or below entry candle.
5. Placing below or above 20EMA only if it is in trending mode (if 20EMA confluence with
daily or other pivot then SL can be below that pivot.

Secrets of using Moving Averages in Day Trading

8 EMA, 20 EMA and 200 EMA (on smaller time frame like 5min)
a. 8 EMA- Only for following the trend after breakout in late afternoon breakout, helps in
riding the winner.
b. 20 EMA- For entering the trend when there is strong momentum on one side.
c. 200 EMA- Works as support and resistance during intraday.

8 EMA, 20 EMA and 200 EMA (on bigger time frame like Daily)
Generally not using 8 EMA or 200 EMA on bigger time frame.
a. 20 EMA is the most important EMA on daily timeframe.
b. Most of the time if market is in uptrend or downtrend and when it comes and touches
the 20 EMA on daily timeframe, larger moves or big bounces takes place in Intraday
(most often and not always).
 How to select Options Strike
Buying vs Selling Options
a. On any day, selling options is always preferable than buying.
b. There are two ways to earn in selling i.e. when market moves in the direction or stays
sideways as compared to buying where market needs to move in the favourable
direction and that too in quick direction.
c. Buying options in a BREAKOUT trade is more preferable.
d. Buying options is also preferable when we expect for the price to fall heavily (generally
in the late afternoon trades).

Selecting Options strikes

a. On regular days, selling options can be done 1-2 strike price away in Nifty or Bank Nifty.
b. On Wednesday and Expiry day selling options can be done 2-3 strike price away with
strict SL (no adjustments).
c. While buying options can buy ATM or slight OTM.
d. For selling options, its always OTM options, neither ATM or ITM.

Position Sizing

% Risk per Trade X Capital

Risk per Trade (SL)

5 Rules of Risk Management

1. The 1% rule (Risk no more than 1% of your capital in each trade, 2% if you are an
experienced trader).
2. Have a Stop Loss (SL) in each and every trade (should be in the system not a mental stop
loss) (Maximum SL 1% of your SL).
3. Have a strict RR ratio of 1: 2 per trade.
4. Never average to your loosing position.
5. Have a daily limit loss of 2% of your total capital.

Powerful ways to control emotions during trading

Have Strict Discipline

a. Trading based on your entry exit rules and never based on your emotions
b. NO FOMO
c. No Revenge Trading
d. No Over Trading

Patience

a. Wait patiently for the right set up, only trade when there is a high probability set up/
pattern.
b. When you are in doubt, do nothing, don’t trade.
 c. Trading should be boring not exciting.
d. Day trading doesn’t mean that one has to be constantly trading the entire day.

Think logically

a. Trading is probability game, any strategy can have a loosing streak (5-10 losses) or winning
streak (5-10 wins). Don’t be fearful when you loose and don’t be greedy when you win.
b. As long as you have a good win rate which is 50% and above and your average win is more
than your average loss, you will stay profitable over long run).

Have Confidence

a. Having confidence doesn’t mean having confidence to take big trade, but having confidence
in your strategy and sticking to it and not jumping from one strategy to another strategy.

Self-Analysis

Do self-analysis of your personality- Ask yourself what’s your weakness?

a. Are you an impatient person

b. Are you short tempered?
c. Are you egoistic?
d. Are you revengeful?

If answer to anyone of this is YES then work on it, because your personality reflects in your
trading.