Steemit Crypto Academy | Course By @stream4u - Technical Indicator: Pivot Points.

Hello friends! This is me @attiyaasghar and here is my homework post for my Prof. @stream4u. In this post, I will present my homework and gave answers to all questions

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Q1. Discussed your understanding of Pivot Points.

Pivot points are a crucial technical tool for indicating the ups and downs in stock exchange and market. There are many other important tools as well, but pivot points are called the main indicators of the market. The usage of pivot points is broad in the stock exchange to examine and forecast the trends of the market over a period. Not only that, but pivot points also serve as an important tool for projecting the future trends of the market in general. Using the indicators is not as easy as it may sound. The respective pivot points must be drawn after detailed analysis of the complex market charts and graphs. Although there are many factors or components to
examine before determining the pivot points. However, the two most important levels, level of resistance and level of support are top of the list. These two levels must be taken into consideration by the traders and the investors to gain maximum profit.

The way pivot points work is simple, they use the data from the previous day and forecast the next day’s trend. The trends of high and low of the previous day are used along with the close levels data to determine the next day high level. The next day high level is also called the resistance, and the support is called the future low level. Therefore, a stock exchange market trader uses this data of the highs and lows of previous day session to indicate or predict the present-day trading in the market. It is an interesting fact that before the discovery of the pivot points, traders had to understand the trends in the market manually which is indeed a tedious job to do. All the data analysis and calculation were done manually, which was undoubtedly time consuming and difficult process. That has drastically change over the years, and now top-notch technology has made it easier to predict the market trends. Understanding the complex data and charts has become easy. Pivot points have allowed new traders to read and understand
charts easily and do trading with ease. Contrary to this, in the early days, manual calculation was required to understand the pivot points.

Q2. Different levels of pivot points

As discussed above, pivot points have different levels, which are defined based on previously gathered data. Below are all the different levels of pivot points:

Main pivot point (PP) Main pivot point is present in the middle of the chart. It is also called the main point.

Support 1(S1) This point is present just below the main point.

Support 2(S2) Support two point is usually present behind support 1 and main pivot point.

Support 3(S3) Also called the third point, present behind S2 and main point.

Resistance 1(R1) Resistance 1 or R1 is the first point above the main point.

Resistance 2(R2) R2 is just above the R1, it approaches the high level.

Resistance 3(R3) Resistance 3 or R3 comes after R2 and the main point. It is the highest point in the chart.

These points are plotted on the chart and afterwards a line is drawn for analyzing the data. The points are shown in the form of lines below:

What do the pivot points tell us?

The main pivot point shows the overall trend in the market. Bullish signs indicate that the price of coins is increasing and the bearish point which lies below the main pivot point show the fall in the prices. The possible change in the price, is implied by the support 1 it usually predicts decline in the price. Thus, if the price of the coins goes towards S1, it can be predicted that the market is going towards a crash. The values are decreasing, in technical terms, the price would move towards a bearish. This movement towards bearish is a hint for traders to start buying
the coins.

Support 2 or S2 shows the direction of the price towards bullish. If the price is moving away from the S2, it means the market is going towards a bearish. And if the price moves in opposite direction, then it means that the market will end up in a bullish. Similarly, Support 3 or S3 also indicates the trend in the market and helps traders understand the right time of buying. 

After support points, resistance points also play a crucial role in trading. Resistance points indicate the bearish point if the price is moving in opposite direction of the resistance points. As the price or money in the market starts moving towards the resistance points, it indicates the time of selling. It is also called the outbrought zone, the zone where selling starts. And it is where the market starts shifting towards bullish. Resistance 2 and Resistance 3 also indicate a similar pattern to traders. If the prices are moving in the direction of the resistance, then it is the right time to start selling. All resistance points are above the main pivot point.

Q3. Calculations of the pivot points and Calculation of pivot levels (R1, R2, R3, S1, S2, S3)

Pivot points Calculations

Resistance 2(R2) Pivot Point + Daily High – Daily Low

Resistance 3(R3) Daily High + 2 x Pivot Point – Daily Low

Resistance 1 (R1) Daily high + x Pivot point – daily low

Main pivot point (PP) Daily High + Daily Low + Close / 3.

Support 1 (S1) 2 x Pivot Point – Daily High

Support 2 (S2) Pivot Point – Daily High – Daily Low.

Support 3(S3) Daily Low – 2 x Daily High – Pivot Point.

Q4. How to Apply Pivot Point on Chart. 

For applying pivot points on to the chart, i used trading view app. here below are the steps of applying pivot points.

Step 1 is to click on option (fx) given on top of the screen in the menu bar.

Step 2 is to search for the pivot point, a list of names will be appear, but you have to select the pivot points standards, as i have pointed with the help of arrow.

Now here below in the screenshot you can see, how the points are getting activated. for further on, you may click onto the settings option below as highlighted , you may go according to your own choice here.




The next you can see blow two options are showing, one is input and other is style, i have chosen the input option.

Finally here it is ready to use.

Q5. How Pivot Points Work

The working of picot points depends on the assets of the previous days, such as their fluctuations to high or low market trends. here below is the screenshot to show how it works by using on Ethereum/ USDT chart.




Bulish Trend : In bullish trend the pivot will indicate us how market goes up from support level to resistance level .as you can see price will go up S1 to R1 its called bulish trend . and that type movement give the good profit. if you want to take profit you must be trade on spot trading.

Bearish Trend : In the bearish trend when the market price reach the Resistance level. it would be come back to support level its called bearish trend. in this chart you are see that price change from R1 to S1

Q 6 .Pivot Point Reverse Trading

For explaining this type of trading I will be using the ETH/USDT chart



In this above mentioned screenshot we can clearly see a reverse trade movement.

So in this picture we can see the price hitting the Resistance (R1) level then taking a pull back  and moving downwards towards the main pivot point.

Q7. What could be a common Mistakes in Trading with Pivot Points

Pivot points are calculated after long calculations so if a trader does one wrong calculation, then his all-data analysis goes wrong. There are also some limitations of pivot points. For instance, they function under a certain price shown by the chart, but it is indeed not always necessary that the price would stop and reverse the levels of the points created on the chart. So, the common mistakes are calculation mistake and less credibility

Q.8. What could be the reasons For Pivot Points is Good.(Pros/Advantages)

Pivot points are a great indicator for traders to determine the phase of selling and buying. Pivot points give traders the information about the trends in the market. Pivot points show traders when the market is going towards bullish or bearish. Pivot points have made life of traders
extremely easy. The supporting and resisting points indicate the specific trends in the market.

Q 9. Apply the Pivot Points indicator in the Today chart (the day when you making this task) and set the chart for 15 minutes. Explain the market trend till the time of writing the task and how it will be next till the end of the day. You can give possibilities on both the side bearish and bullish


For the analysis of the charts and the price trends, I decided to apply the pivot points on the current chart of Ethereum coin. As discussed earlier, pivot points help us to ready any chart at any given time. Furthermore, by applying the pivot points to any coin’s chart, traders can decide the time of selling and buying.  As indicated in the above screenshot, we can deduce that the points below the main pivot point would be indicating towards bearish and the points above the main point would be directing towards bullish. In this example, we can see that the market has started with being in bearish. As the points are below the main pivot point. As with the passage of time, the market is increasing, and the points are moving above the main pivot point. The market goes in bullish. The stay in bullish is for a short span, after which the market again goes back to bearish.

Q10. Weekly Price Forcast For Crypto Coin


Recently, the prices of coins have been dropping drastically, after a crash in the
market. Ethereum has also seen decline in its prices as well. The price of Ethereum was dropped below $ 1,800 for first time on 23 May. The market collapsed by 60%, it had reached all time high price of 4,362. Keeping the trend in view, it can be forecasted that the price of Ethereum would be dropping even more. However, the drop would be steady not as drastic as it happened recently.

About the Ethereum Ethereum is an open source, cryptic, block chain-based currency. After bitcoin, it is the second largest coin in the crypto market. It is one of the most actively used blockchains in the market. And has gained popularity over the years due to it being open source and encrypted

Conclusion :

Blockchain and crypto has gain more popularity and attention over the years. The market of
blockchain has been growing rapidly. More and more users are joining the platform as traders and investing in buying coins. The market is booming day by day, due to its amazing service of removing the third party in between transactions.  The stock market is becoming an important component of global economy. It is attracting more and more contributors to the platform. Although, the whole platform is concerned with traders and investors, but now other people are also taking interest. However, for most people, bitcoins would be just charts, complex numbers, or trends. But if you understand the trends and what the data represents, it will
give you sufficient data. In contemporary times, the concept of pivot points has made it even easier for traders and investors to predict the market flow. Moreover, not only traders and investors but also common individuals who are interested in the market get sufficient data from pivot points. Pivot points serve as the main indicators in predicting the trends of the market. For instance, the supporting points below main pivot point show that the market is
moving towards a decline, which in technical terms is called a bearish point. And the resisting points above the main point indicate that the market is moving towards the bullish point. Pivot points have been helping traders to decide when to start buying and sell the coins.

Even though, the market has seen a drastic decline recently. Due to some unforeseen circumstances, the overall crypto market has seen a decrease in the rates. And people who were doubtful of the crypto market have started criticizing the market all together. Many economic giants have claimed that the crypto currencies future is not secure, and it will diminish soon. And, after the recent drastic decline in the market, the criticism has even increased. But the crypto experts have faced all the criticism by saying that blockchain is the
future of economy. And the main purpose of blockchain based crypto is to end the role of third parties. They want to end the hegemony of the economy giants. Let us see if this dream would one day become a reality or would just be a dream.

REGARD
@attiyaasghar