Make Money Trading Foreign Currency Using Pivot Points
Here’s the guys from Leverage FX
with a great video on pivot trading with examples from the
EUR AO-FX 15M and others
Make money trading foreign currency using pivot points.
Pivot points are based on the previous days weeks and months high low close
There are low risk areas to get in and out of trades.
The general rule of thumb is when you are above the white line area you will go long and when you are below the white line you want to go short or look for shorts.
If the markets underneath the price of the previous day its likely to go down, If the markets above the average price of the previous day its likely to go up
This is one rule that most pivot traders use.
Because so many traders use the pivots they also make tremendous support resistance areas.
Another example was where the market was already in a downtrend with sideways consolidation and it finds support at the first
Midpoint, it ten trends downwards and finds support at the next
Midpoint almost to the pip. So if you are looking to find areas to counter trend the pivot areas are wonderful areas to get into relatively low risk trades.
Continues to go down to the next midpoint and consolidates again.
When a market has been in a downtrend for a few days they are likely to make a run up to the previous days average price and when that does not happen it gives you a very big clue that its likely to go down.
So you have multiple resistance levels which the market finds support on which is a pretty safe place to buy,
If you go short in a market and it immediately comes back up the pivot you get out with a short loss which is nice about the pivot trading system.
When your right you make a lot of pips, when you wrong you make a short loss which is about 5 10 pips.
Most traders who use and trade off the pivots look to buy right at the pivot. The pivot is the most powerful of all the levels discussed.
At around about 8:24,
the market pulls and you get in at 1.3155 because the previous day was above the pivot, the trends up and we are buying dips to the pivot in anticipation that the above trend is going to continue and that’s what happened with a 30 pip move upwards
