pivot

Pivot Points and Market Sentiment:

Forex trading is a multi-layered profession which has many appealing features and links. The link between Pivot Points and Market sentiments is one of its most attractive elements. It immediately excites and inspires traders and investors. There is a very amazing link between these two features of Forex trading. But at the same time, there are some assumed myths about their link. Newbies often misunderstands their relation due to these myths. So let’s have a look at their relation and debunk the false myth about them.

Advantages of this link between Pivot Points and market sentiment:

First of all, the Pivot Points exposes a crucial fact for profitable Forex trading. It highlights the interest of the investors. You can have a clearer idea about next move of Forex market if you know whether the investors are more interested in buying or selling a currency pair. Thus you have to closely watch the Pivot Points. After all, you all want to earn profit in Forex trading. The link between Pivot points and market sentiments helps you to achieve this goal. Similarly with the Pivot Points, you can judge if the buyers or the sellers are dominating the Forex market.

Debunking the myths:

It is a very easy to understand and analyze the exciting link between Pivot Points and Market sentiments. But at the same time, there is myth that if the value of a currency breaks through the Pivot Point and moves upwards then it is an ideal time to buy that currency. Such a state of Forex market reflects a bullish trend. Therefore you should not wait any longer as it is the best time for buying.  Frankly it is just a falsely believed myth and nothing else.

Alternatively if the price of a currency breaks through the Pivot Points but moves downwards then it is right time to take action. You should quickly sell the currency. No doubt such a state in Forex market indicates bearish trend. But it is not a sure signal of success and profit. Sometimes price soars high after such a state. Therefore if you believe that you should not hold the currency, it is definitely wrong.

Conclusion:

Actually for profitable Forex trading, you should combine the analysis of Pivot points with other Forex indicators. Only Pivot Points cannot serve you well.