Use of Pivot Points in Forex Trading

pivot points

Support and Resistance hold great significance in FOREX Trading. Different traders and investors use different indicators to identify the Support and Resistance points. Basically Pivot point and the indicating support and resistance points reflect the future movement of the price of the currency. The acronyms and symbols used for pivot points is ‘PP’ in FOREX charts. Similarly ‘S’ stands for Support and ‘R’ means Resistance in FOREX charts. Traders prefer Pivot points because they indicate accurate results and the results are objective. There is no subjectivity or discretion involved in the PP. Strength of PP is that it is not difficult to check and test its validity and how the value of the currency reacts to them.


Pivots are the center of attention of millions of traders and you should also observe and keep a close watch on them as well. Different kinds of traders use them for different purposes.

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Significance for Day Traders:

Although it is helpful in trade of all kinds, however it is mostly used for Short-term trade. Similarly the investors who are interested in short-term duration trade such as day traders pay special attention to pivot points.

Significance for Range- bound Traders:

At the same time, pivots are also preferred by Range- bound traders as they use them to identify the beneficial reverse levels or points where they can trade. They mostly place and set their sell or buy orders at those points to survive and earn profit in FOREX trade.

Significance for Breakout traders:

The breakout traders use PP to identify the points that would be broken. In this way, they are able to make a prominent deal breakout.

Back testing:

There is FOREX calculator to calculate PP if you want to back test the validity of pivot points in the past. It is very easy to use this calculator to calculate pivot points.

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