The Pivot Method is a trading approach that uses four exponential moving averages—9, 21, 34, and 200—to gauge trend direction and entry points, while a pivot level defines profit targets. The annual pivot is calculated from the high, low, and close of the last monthly candle, and it carries significant weight. I’ve seen some traders derive weekly pivots from H1 candles on the weekly chart, which doesn’t make sense to me in practice—I use the W1 candle to calculate the weekly pivot.
Let’s start with gold: it has just hit the 100% level of the annual pivot, meaning it’s moved from this year’s pivot the same distance it moved last year from its pivot. Big price moves often consolidate around the 0.382 retracement levels, forming a range or “table.” Gold has now reached the 100% level, is consolidating in a triangular pattern, and looks set to revisit the blue rectangle—our Fair Value Gap—which also lines up with the 0.382 level of the monthly pivot.
As the month draws to a close, it’s wise to check the monthly pivot. Entry timing can vary by chart, but ideally you’d enter near the 21‑ and 34‑period averages, preferably on a red candle.
See the example using a 3‑period pivot.
Let’s start with gold: it has just hit the 100% level of the annual pivot, meaning it’s moved from this year’s pivot the same distance it moved last year from its pivot. Big price moves often consolidate around the 0.382 retracement levels, forming a range or “table.” Gold has now reached the 100% level, is consolidating in a triangular pattern, and looks set to revisit the blue rectangle—our Fair Value Gap—which also lines up with the 0.382 level of the monthly pivot.
As the month draws to a close, it’s wise to check the monthly pivot. Entry timing can vary by chart, but ideally you’d enter near the 21‑ and 34‑period averages, preferably on a red candle.
See the example using a 3‑period pivot.
Attached Image(s) (click to enlarge)
