What is Pivot point trading?
Pivot point trading is a technique widely used among Forex traders, that allows to determine important support/resistance levels for the day which derived from the previous day’s trading range. Pivot points — the key levels or certain price values for a current day — are points around which traders base their entries and exits. There are 5 major and several additional pivot levels, we are going to learn about them later. In simple words, it is similar to knowing where the price is going to stop and reverse and how far it will go next time: The knowledge of such support/resistance levels is priceless as it allows to get in / out of the trade, set stop and profit orders with maximum advantage to traders. In fact, if you have troubles seeing where the market is going, Pivot points can give you a clue! It is like having a map on your charts! Compare the two charts below. That’s the way traders would see a chart without Pivot points. That’s the chart with a Pivot “map” on it: Obviously, the
