Forex Indicators_10. Forex Pivot Points

Lesson 10: Forex Pivot Points

Pivot Points are technical indicators that help you determine potential support and
resistance areas. But unlike Fibonacci, a Pivot Point uses set calculations of the
previous day’s high, low and closing prices to plot these levels - so they are much
more objective.
This type of indicator is especially useful for day traders; one way of using Pivot
Points is to enter the market in the direction of the breakout. The price has dropped
to R1 level, so we can buy and set our target price to the next resistance line.

So the first target would be at the R2 and the second target at the R3. Traders often
use candlestick analysis to trade the reversals at pivot points.
To illustrate, here, as the prices form the bullish engulfing signal at S1, we could
buy the market with the targets at pivot level and R1.