Pivot points are a widely used technical analysis tool that help traders identify potential support and resistance levels in the market. They provide clear reference points that assist in planning entries, exits, stop-losses, and profit targets.
Calculated using the previous period’s high, low, and closing prices, pivot points can quickly highlight key price levels likely to trigger market reactions.
🧮 4 Major Types of Pivot Points
There are four commonly used methods to calculate pivot points:
- Standard Pivot Points
- Woodie Pivot Points
- Camarilla Pivot Points
- Fibonacci Pivot Points
Each method offers slightly different levels and trading insights. Try them out to find the one that fits your strategy best.
💡 Quick Tips for Pivot Point Trading
Master these simple tips to boost your pivot point trading:
- Pivot points often act as magnets for price. Most forex pairs oscillate between R1 and S1 levels.
- You can trade reversals near these zones or breakouts when price breaches them.
- Range traders buy at support (S1, S2) and sell at resistance (R1, R2).
- Breakout traders wait for confirmation of price breaching these levels.
- Sentiment traders use the pivot point itself as a guide—above means bullish, below means bearish.
🔧 Pro Tip: Combine for Confirmation
Don’t rely solely on pivot points. Enhance your setup using:
- Candlestick patterns
- RSI and Stochastic indicators
- MACD or Moving Average crossovers
The more confirmations, the higher the probability of a profitable trade.
🧠 Test Your Knowledge
Want to see how well you understand pivot points?
👉 Take the Pivot Point Quiz to test your skills and reinforce your knowledge!
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