What is the best indicator to combine with pivot points?

There are so many indicators out there plus traders have their preferences.
On many times you have to see how indicator of your choice reacts with Pivot Points levels.

Still, there is few indicators and tactics that works so well with Pivot Points that I recommend to give them a try.

1.Bollinger Bands

You combine Bollinger Bands with Pivot Points. Watch how price reacts with upper and lower bands sespecially when price is near R or S levels.

Bollinger Bands can give you information early that move is getting near to the end or possible level or support/resistance. Read more how to trade with Bollinger Bands here and then try to add to it Pivot Points.

2Basic moving averages

We’re talking here about basic moving averages such as 21, 50, 100, 200 from current time frame and higher time frames. Simple example. You see on weekly time frame that price gets close to the 50 moving average and at this area you see R2 from daily Pivot Points then this makes that specific area more significant as resistance.

3.CCI

CCI is based on averages. You can pay attention to CCI’s oversold (below -100 or -200) and overbought (above 100 or 200) behaoviour. Also, keep an eye on CCI extremes. If CCI is getting way above 300 or below -300 then risk or correction or reversal gets bigger.

You can add to that Pivot Points and when you see that CCI is getting to that oversold, overbought or extreme levels near important R or S Pivot Points levels then you can use that information to plan your move.

4.Divergence

Divergence is a situation on chart when price makes new high but indicator fails to move higer and other way for new low scenario. Check this RSI example:

I recommend to try RSI or MACD, divergence based on them is pretty solid. If you struggle to find divergence then search for indicators that marks it on chart. Example: RSI Divergence Indicator.

Now you can combine that with Pivot Points. If you see that price makes strong move up, new high for the day and approach R2 or R3 but there is a divergence on RSI or MACD then reversal or move up might be on the way.

Remeber, divergence doesn’t mean 100% probability of the reversal. It’s a strong suggestion that there might be move in other direction but you need a confirmation (trendline break, price action etc.).

5.Supply demand indicators

You look for places where supply/demand zones are in the same place as R or S Pivot Points levels. If you find one that makes that specific are more important resistance or support.

You can find them manually (chart analysis) or use indicator such as X which marks recent supply/demand zones.

6.Price action, candlestick patterns

Price action – especially based on higher time frames – can be a great help to identify more important Pivot Points levels. It’s not that complicated. For example, you noticed that there is a pinbar on daily time frame and it’s close to the weekly R2 resistance. That means that we have a good probability of at least small correction from that place.

If you struggle with recognizing candlesticks patterns then you can use incidators such as X which marks them on chart. It’s helpful especially when you switch between many time frames and instruments all the time.

7.Indicator of your choice

Remember. You can also try to use indicator of your choice that you like most.

Just few tips:
check if this type of indicator gives you divergence signs
check how oversold, overbought areas of that indicator work when price is near important Pivot Points levels
check different combinations of time frames and types of Pivot Points

To sum it up

There is no one single indicator that works best with Pivot Points. You can try to use indicator you like or check my tips from that article.

For me it comes to observation of price, Pivot Points levels and your indicator. You see how it reacts near important levels and you try to build a system around it – when to enter, when to exit and so on.

Pivot Point Trading