Author: Aborigen
Description:
Pivot Points are crucial indicators that can help traders identify key turning points in market price movements. These levels can be applied across various liquid markets with stable price ranges, making them particularly effective in futures trading and Forex.
When a market trends, the price often oscillates from a Pivot Point to the first or second support or resistance levels. Notably, the second support or resistance area is frequently regarded as a target for price movement, providing traders with valuable insight.
In many cases, prices will navigate between the first support and resistance levels within a defined range, with the Pivot Point acting as the central axis for price rotation. This is where things can get interesting!
One challenge traders face is needing a solid foundation for entering trades. Finding a starting point where the market might reverse or adjust is vital. This is where Pivot Points, along with their associated support and resistance levels, come into play, offering traders a reliable tool for making informed decisions.
Of course, it’s essential to remember that market behavior can be unpredictable. Prices can break through these levels, reverse unexpectedly, or sometimes not even reach the anticipated level before turning. This volatility is just part of the game. However, despite these quirks, Pivot Points have proven their worth and remain a popular tool among traders.
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