Mean reversion
Pivot Point Bounce
Trade reactions at predefined pivot support and resistance levels.
Pivot points give day traders a ready-made map of intraday support and resistance. The bounce strategy trades reactions at these levels, buying support, selling resistance, with confirmation to avoid catching clean breaks.
How it works
Price often reacts at the central pivot and the S1–S3 / R1–R3 levels. The strategy looks for a rejection (e.g. a wick or reversal candle) at a level, then enters the bounce toward the next level, with a stop just beyond the level that was tested.
Entry rules
- ▸Identify price approaching a pivot level (PP, S1–S3, R1–R3).
- ▸Wait for a rejection/confirmation candle at the level.
- ▸Enter the bounce toward the next level.
Exit & risk
- ▸Target the next pivot level.
- ▸Stop just beyond the tested level.
- ▸Exit if the level breaks decisively (no bounce).
Best for
Ranging intraday sessions in liquid markets. On strong trend days levels break rather than hold, so confirmation and a tight stop matter.
Build this strategy in Algovex
Every component of this strategy is a node in Algovex — drop them on the canvas, connect the logic, backtest on a real engine, and export to code. No programming required.
Key terms
Frequently asked questions
How do you trade pivot point bounces?
Wait for price to react at a pivot level (central pivot or S/R) with a rejection candle, then enter the bounce toward the next level with a stop just beyond the tested level. Algovex computes the pivots and lets you backtest the bounce.