Forex Pivot Point Trading are used today by Forex Traders and are calculated on the previous days move and trades are entered when the market hits a support or resistance line of the pivot point providing your OB/OS indicator is in agreement. All the support and resist lines are put in place 1st thing in the morning. then you wait for the market to hit those entry points.

Contrary to what some might believe, trading Forex with Pivot Points are probably the most popular method used in trading the financial markets today. Long before the invention of computers this was the method used by the traders in the pits to determine hidden support and resistance levels.

The Pivot Point is still used by experienced floor traders and technical analysts alike. The major advantage now is that we now have computers and can calculate our points well in advance. Many charting packages can calculate them for you automatically, thus enhancing the use of Pivot Points.

Whilst there is a lot more to Pivot Point Trading in Forex Trading than we will be mentioned in this article, the purpose of this exercise is to introduce you to the concept of trading Forex with Pivot Points.

Remember the market can only go up, down, or sideways. It is like an elastic band that has been stretched, sooner or later it will rebound to an equilibrium point where the market is in balance, and then stretch the opposite way only to rebound and reach another balance point. Then some fundamental announcement or happening will drive the market in a new direction and so on day after day. Pivot Points can aid us in determining how far that elastic can stretch before it rebounds.

Whilst there are many time frames that can be used for calculating Pivots, for the purpose of this exercise lets concentrate on the daily time frame (i.e.: 24hr) Pivot Points are calculated using the previous days, Open, High, Low, and Close figures. There are many Pivot Point calculators available on the web so you don’t have to waste your time doing the calculations manually. 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.

Pivot points unlike many other indicators are an objective tool. Because they are mathematically calculated, there can only be one answer for a specific time period.

Many subjective indicators like Fibonacci retracements, (and I am a great fib fan) Elliot waves etc. can have different people trading in different directions at the same time due to individual interpretation..

The PP’s can help you to predict the next day’s highs and lows in advance. PP’s can give you anything from 4 nak nek 8 support and resistance levels. However you still have to be able to identify the trend to be a successful PP trader. Pivot Points also work best in a trending market.

Entry and exit points

Pivot Points can give you exact entry and exit points, rather than enter markets that are in the middle of a run, or about to turn the other way. Here is where we use other indicators to assist on the entry or exit. 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. Or if a Fibonacci level coincides with a Pivot Point level it can make a strong case to enter or exit a trade. If the market is bullish and your favourite indicator is not near overbought, when it hits the first resistance level then you probably have a good case to stay in the market and make your profit target the next Pivot Point resistance line. The breakout above the 1st resistance level can then become your new stop or stop reverse.

Obviously the reverse is true of the support level as well. By combining the Pivot Points with your favourite indicator you can develop your own trading system that no one else uses.

Trading for the day will probably remain between the 1st support (S1) and resistance (R1) levels as the floor traders make their markets. Once one of these levels is penetrated other traders will be attracted to the market, and should the second level be breached, the longer term traders are attracted to the market.

Knowledge of where the floor traders are expecting support or resistance can be a distinct advantage especially when there is no outside influence in the market. Provided no significant market news has occurred between yesterdays close and today’s opening, the local floor traders and market makers tend to move the market between the Pivot Point (P) and the first support line (S1) and resistance (R1) If one of these levels is breached then expect the market to test the next levels (S2) and ( S3) or (R2) and (R3)

Whilst there are many other aspects to Pivot Point trading why not try this simple method first and see if you can develop your own strategy by using your existing trading technique’s in conjunction with the Pivot Points.

címkéjű:

Kategória: Forex technikai & alapvető elemzés

Tetszik? Iratkozzon fel RSS-én és nagyobb terhelést kap!

Esetleg kapcsolódó hozzászólások

  • How To Calculate Forex Pivot Points These points are calculated mathematically based on the low, high and closing prices of the previous day. They are calculated as daily, weekly or monthly pivots, it provides the significant points of resistance or support that you can use for good continuation or reversal setups as well as profit targets or stop loss positioning. Lots
  • What’s Pivot Point indicator The levels of the pivot are so popular because they are easily predictable levels and they are very useful to make a decision in the trading day using data from the past days to find the potential levels of the trend switch. You should
  • Pivot Point Trading: Your Step-by-Step Guide to Profitable Day Trading with Pivots Points Pivot Point Trading: Your Step-by-Step Guide to Profitable Day Trading with Pivots PointsKindle edition by Alton Swanson. Töltse le egyszer, és olvassa el a Kindle készülék, PC, telefonok és tablettát. Használható funkciók, mint a könyvjelzők, note taking and highlighting while reading Pivot Point Trading: Your Step-by-Step Guide to Profitable Day Trading with Pivots
  • Trading Pivots Like A Pro A Guide To Efficient Understanding For many years, traders and market makers have used pivot points to determine critical support and/or resistance levels. Pivots are also very popular in the Forex market and can be an extremely useful tool for range-bound traders to identify points of entry and for trend traders and breakout traders to spot the key levels that
  • Forex Pivot Points, The Basics Forex is the largest financial market in the world, and yet it is relatively unfamiliar terrain to retail traders. There are many important notes that can be made on Forex and many points that both present and potential investors should be aware of, one of the most important involving Forex pivot points. Forex Pivot Points Using pivot
  • Person on Candlesticks and Pivot Points: Trade Setups and Triggers (Book/DVD Set) Person on Candlesticks and Pivot Points: Trade Setups and Triggers (Book/DVD Set): 9781118626276: Economics Books @
  • The RDS Forex System: A Breakthrough Method To Profiting from Market Turning Points (Wiley Trading) Rated 3.0/5: Buy The RDS Forex System: A Breakthrough Method To Profiting from Market Turning Points by Michael Radkay, Stephanie Radkay: ISBN: 9781118096680 : 1 day delivery for Prime members
  • What Is Forex Support and Resistance Levels? use them for trading? Well, we do it in the way that all Forex traders know, with a graph and a pen. There really is no better way for it! Your goal here is to help establish a trend, if you can establish a trend, then potentially it is much safer to trade on the
  • Trading it to the Next Level: Scalping Forex with Bollinger Bands (Vol. 2) (Scalping Forex with Bollinger Bands and Maximizing Profits) Buy Trading it to the Next Level: Scalping Forex with Bollinger Bands (Vol. 2) (Scalping Forex with Bollinger Bands and Maximizing Profits): Read 1 Kindle Store Reviews
  • Binary Options Diamond Reveal The Mystery With The New Tools In Your Trading Arsenal: Candlestick Pattern Recognizer And Divergence Pattern