New topic - forex pivot points: entry.

New topic - forex pivot points: entry.

Now as we are done with the trading patterns we can go on to another topic – pivot points.

I can tell you at once that right now you are not going to understand what these are. Let’s just say that forex traders use pivot points in order to identify support and resistance levels. In essence pivot points and their support-resistance levels are the areas where the price can change. In a way they are a lot alike to Fibonacci levels, but they are more objective than those.

They are also alike to Fibonacci because they are kinda self-fulfilling, meaning that they work because people want them to work and because those, looking at the levels are sticking to what they are showing. 

Pivot points also calculated almost identical with Fibonacci.

Pivot points can be used by traders who prefer short-term trading to the long-term one. They can be used to identify bounce or break of the price.

Range-bound traders use pivot points to identify reversal points. Breakout traders use pivot points to recognize levels that need to be broken. Here is an example of what we are going to talk about:

Image
Here in the picture:
 
  • PP for Pivot Point.
  • S for Support.
  • R for Resistance.

In case you are confused right now, so not be afraid. We are going to learn everything as we go further into the lessons.

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