Review: USING PIVOT POINTS TO IDENTIFY SUPPORT & RESISTANCE LEVELS
Rating: 5 out of 5
Date: 06 22, 2014
Using Pivot Points as a trading strategy has been around for a long time, originally used by floor traders.  It was an easy way for traders to have some idea of where the market was headed.  A Pivot Point is the level at which the market changes direction for the day.  Using some simple math and the previous day’s high, low and close; a set of points is identified.  These points can be important support and resistance levels.  The reason Pivot Points are so popular is that you use the information from the previous day to calculate potential turning points for the current day.  Because so many traders follow Pivot Points you will find that the market reacts at these levels and this gives you an opportunity to trade.  Pivot Points are used in two ways; to determine market trend and to identify exit and entry points.  They allow traders to quickly calculate levels that are likely to cause price movements.  A successful trader utilizes Pivot Points and a number of other technical indicators such as MACD crossovers and Candlestick patterns to accurately predict the direction of the market.  Swanson does an excellent job writing about this strategy, Thumbs Up!