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    What Are Pivot Points

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    TermureAron
    Pivot points are technical analysis tools that identify potential support and resistance levels where the direction of price movement may change. They are objective as there is a set method for calculating them. Pivot points are similar to Fibonacci levels in that traders watch for bounces off or breaks of these levels. Traders can use pivot points to identify reversal points for range-bound trading or breakout levels for breakout trading. The example shows horizontal support and resistance levels placed on a chart according to the pivot point method.

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    What Are Pivot Points

    Uploaded by

    TermureAron
    23 views3 pages
    Pivot points are technical analysis tools that identify potential support and resistance levels where the direction of price movement may change. They are objective as there is a set method for calculating them. Pivot points are similar to Fibonacci levels in that traders watch for bounces off or breaks of these levels. Traders can use pivot points to identify reversal points for range-bound trading or breakout levels for breakout trading. The example shows horizontal support and resistance levels placed on a chart according to the pivot point method.

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    1. What Are Pivot Points

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    Pivot points are technical analysis tools that identify potential support and resistance levels where the direction of price movement may change. They are objective as there is a set method for calculating them. Pivot points are similar to Fibonacci levels in that traders watch for bounces off or breaks of these levels. Traders can use pivot points to identify reversal points for range-bound trading or breakout levels for breakout trading. The example shows horizontal support and resistance levels placed on a chart according to the pivot point method.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    23 views3 pages

    What Are Pivot Points

    Uploaded by

    TermureAron
    Pivot points are technical analysis tools that identify potential support and resistance levels where the direction of price movement may change. They are objective as there is a set method for calculating them. Pivot points are similar to Fibonacci levels in that traders watch for bounces off or breaks of these levels. Traders can use pivot points to identify reversal points for range-bound trading or breakout levels for breakout trading. The example shows horizontal support and resistance levels placed on a chart according to the pivot point method.

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    of 3

    1.

    School of Pipsology
    2. Middle School

    What Are Pivot Points?


    What are pivot points?

    Professional traders and market makers use pivot points to identify potential
    support and resistance levels.

    Simply put, a pivot point and its support/resistance levels are areas at which the
    direction of price movement can possibly change.

    The reason why pivot points are so enticing?


    It’s because they are OBJECTIVE.

    Unlike some of the other indicators that we’ve taught you about already, there’s no
    discretion involved.

    In many ways, forex pivot points are very similar to Fibonacci levels. Because so
    many people are looking at those levels, they almost become self-fulfilling.

    The major difference between the two is that with Fibonacci, there is still some
    subjectivity involved in picking Swing Highs and Swing Lows.
    With pivot points, forex traders typically use the same method for calculating them.

    Many traders keep an eye on these levels and you should too.

    Pivot points are especially useful to short-term traders who are looking to take
    advantage of small price movements.

    Just like normal support and resistance levels, forex traders can choose to trade
    the bounce or the break of these levels.

    Range-bound traders use pivot points to identify reversal points. They see
    pivot points as areas where they can place their buy or sell orders.
    Breakout forex traders use pivot points to recognize key levels that need to be
    broken for a move to be classified as a real deal breakout.

    Here is an example of EUR/USD pivot points plotted on a 1-hour chart:

    As you can see here, horizontal support and resistance levels are placed on your
    chart.

    And look…they’re marked out nicely for you! How convenient is that?!

    Pivot Point Lingo


    Here’s a quick rundown on what those acronyms mean:

    PP stands for Pivot Point.

    S stands for Support.

    R stands for Resistance.

    But don’t get too caught up in thinking “S1 has to be support!” or “R1 has to be
    resistance.”
    We’ll explain why later.

    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!

    Did this content help you? Please consider supporting BabyPips.com. Your contribution will enable us to keep
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    Middle School
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    1. Grade 6

    Oscillators and Momentum Indicators

    1. Leading vs. Lagging Indicators

    2. How to Use Oscillators to Warn You of the End of a Trend

    3. How to Use MACD to Confirm a Trend

    4. Summary: Leading and Lagging Indicators

    2. Grade 7

    Important Chart Patterns

    1. How to Trade Chart Patterns

    2. How to Trade Double Tops and Double Bottoms

    3. How to Trade the Head and Shoulders Pattern

    4. How to Trade Wedge Chart Patterns

    5. How to Use Rectangle Chart Patterns to Trade Breakouts

    6. How to Trade Bearish and Bullish Pennants

    7. How to Trade Triangle Chart Patterns

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