Wednesday, September 9, 2009

How To Trade With Pivot Points

Breakout Trades
  • The pivot point (PP) should be the 1st place to look at to enter a trade, since it is the primary support/resistance level.
  • When price reaches the pivot point (PP), you will be able to determine whether to go long or short, set your profit targets & stops.
  • If prices are above the pivot it's consider bullish.
  • Let's say the price is hovering around the pivot point and closes below it so you decide to go short. Your stop-loss would be above PP & initial profit target would be at S1. If you see prices continue to fall between S1, move your existing stop-loss order just above S1 & wait till hit S2.
  • The same thing if prices move during an uptrend.

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