For your typical day trader, using the Pivot Point indicator (PP) is one of the right trading techniques. Typically that describes the price movement within a one-day trading range, making many day traders expect profit by using the pivot point.
Pivot point is used to determine potential support and resistance area in technical analysis by certain calculation. This calculation refers to the yesterday’s moving average. This is what makes the pivot point considered objective determine the level of support and resistance.
Here are some tips for you who choose to be day trader with pivot point strategy.
- Determine the time to enter the position wisely
Pivot point is used with the aim that you can entry and exit positions within the same day as long as the forex market you choose is running. One of them when the European session is considered to provide the greatest trading opportunities for trading tools. Especially when the overlap of European and American sessions will be a lot of market participants. This you can choose.
- Pivot point is considered to be the main key attention of traders
Market trends are one important thing that traders must pay attention to before determining a position. Using a pivot point can help you to see the key level of a market trend because you will be shown the potential level to enter the position of yesterday’s trading average by showing support level 1 (S1), resistance 1 (R1), support 2 (S2) , resistance 2 (R2), support 3 (S3), and resistance 3 (R3).
- Enter the position when the price touches R1 and S1
Level R1 and S1 are the most potential level to enter the position of the pivot point level. Note if the price moves frequently touched that level and stuck in the area, then that is a sign of potential area to enter the position may be useful.