Pivot points are a classic tool in technical analysis, offering a structured way to anticipate potential turning points in price. They are calculated using the high, low, and close from the previous trading session and generate a central pivot along with support and resistance levels. In the fast-paced world of Share CFDs, these levels serve as reference points that can guide decisions throughout the trading day.

Here is how pivot points come into play as the day unfolds.

Before the Market Opens

The day begins with planning. Before the market opens, traders using pivot points have already calculated key levels: the central pivot, S1 and S2 (support levels), and R1 and R2 (resistance levels). These act like a trading roadmap.

For Share CFDs, this preparation gives structure to what might otherwise feel like a chaotic session. Traders can place alerts at these levels or prepare trade scenarios in advance. Knowing where price might react helps reduce emotional decision-making during fast-moving periods.

During the First Hour of Trading

The first hour is often the most volatile part of the session. Price can swing quickly as traders react to overnight news, earnings, or global sentiment. Pivot points offer structure here.

If the market opens above the pivot and holds, it may indicate bullish momentum. Traders might look for long opportunities targeting R1 or R2. On the other hand, if the price opens below the pivot, the focus may shift to short setups with S1 or S2 as potential targets.

In Share CFDs, where leverage increases both opportunity and risk, having predefined zones like pivot levels keeps traders grounded amid the early chaos.

Midday Consolidation

Midday often brings a slowdown in volume and a tightening of price action. During this period, pivot points become useful as reference levels to monitor consolidation.

Price may hover around the pivot level or stall between the first levels of support and resistance. Traders can observe whether the price is respecting these levels or gearing up for a breakout.

For Share CFDs, staying patient during the midday lull and using pivot zones to watch for potential breakouts or breakdowns helps avoid overtrading during low-volatility stretches.

Late Session Setups

In the final hours of the trading day, volume often picks up again. Momentum trades develop as institutional activity returns or traders reposition for the next session.

If price revisits a pivot level late in the day, it can either act as a reversal zone or a breakout point. This is where volume and price reaction to the pivot level are key. A break of R1 with strong volume late in the session, for example, could offer a breakout entry with a short-term target at R2.

Traders working with Share CFDs often look to these levels for fast trades to close out the day or as a setup for the following session.

Post-Market Review

After the close, traders can evaluate how price behaved around the pivot levels. Were there bounces at support? Did resistance hold? This review helps refine the use of pivot points and improves planning for future sessions.

In Share CFDs, this review is especially valuable since trades are often short-term. Reviewing how price interacted with key levels gives insight into market structure and helps traders adapt their approach.

Pivot points bring clarity and structure to every phase of the trading day. Whether price is trending or ranging, these levels offer valuable guidance for entries, exits, and stop placement. For traders using Share CFDs, pivot points simplify decision-making and reduce reliance on emotion by providing clear, repeatable reference points.