The pivot point bounce trading system uses a short term timeframe and the standard daily pivot points, and trades the price moving toward, and then bouncing off of any of the full or half way pivot points.
Pivot points are support and resistance levels that are calculated using the open, high, low, and close of the previous trading day. The pivot points include the pivot point itself, six full support and resistance points, and four half way support and resistance points, and are collectively referred to as the pivot points. When the price approaches a pivot point (especially for the first time in each direction), it will have a tendancy to reverse, and it is this reversal that is used by the pivot point bounce trading system.
The default trade uses a 1 to 5 minute OHLC (Open, High, Low, and Close) bar chart, and the daily pivot points. The chart timeframe can be adjusted to suit different markets. The default trading time is any time that the market is open, but for best results the market should be active, such as during the European morning for European markets, and during the US morning for US markets.
The following tutorial steps use the DAX futures market, but exactly the same steps should be used on whichever markets you are trading with this trade. The trade used in the tutorial is a short trade, using 1 contract, with a target of 20 ticks, and a stop loss of 10 ticks.
