What is Pivot Points?
Pivot Points is a core concept in currency trading.
Objective mathematical price levels calculated from the previous session's high, low, and close, used as intraday support, resistance, and sentiment gauges.
Understanding Pivot Points helps you manage your risk and spot high-probability trade setups.
Why It Matters for Forex Traders
In forex trading, Pivot Points helps you protect your capital. It gives you a clear rule to follow instead of guessing.
How to Identify and Apply Pivot Points
- 1Spot and mark Pivot Points on your chart during active trading hours.
- 2Check that the overall market trend agrees with your trade idea.
- 3Always place a protective stop loss before entering any position.
Practical Forex Example
For example, on a EUR/USD trade, applying Pivot Points allows you to set clear entry and exit points before risking real money.
PRO TRADER TIP
Always test strategies involving Pivot Points on a free demo account first before trading with real capital.