similar to Fibonacci levels. They are used as the basis for most technical analysis. In the following lessons, you will learn how to calculate forex pivot points, the different types of pivot points and most importantly, how you can add pivot points to your forex trading toolbox!
They see pivot points as areas where they can place their buy or sell orders. But you may be asking, Why should we look at yearly pivots? Further cable weakness as indicated by a daily close below the S1 pivot could lead to a repeat of last years decline to the S2 pivot. Then you wait for the market to hit those entry Points. Could we see similar moves in 2014? Heres quick rundown on what those acronyms mean: PP stands for Pivot Point. Also bear in mind the longer the time frame you are using the longer you must be prepared to stay in the market or wait for the next entry point. If the market stalls at a Pivot Point level, and you have an overbought or oversold indicator that will be a good time to get in or out.
Its because they are, objective. Here is an example of pivot points plotted on a 1-hour EUR/USD chart: As you can see here, horizontal support and resistance levels are placed on your chart. Pivot points are especially useful to short-term traders who are looking to take advantage of small price movements.