GBPUSD 1hour Trade
Candlestick Patterns and Pivots – The value of pivot points
Candlestick pattern trading techniques are used by astute traders and investors in every type of market.
They represent tools that allow individuals to recognize opportunities presented more efficiently than a simple examination of the data as represented by a historical bar chart.
The most professional and successful investors recognize that candlesticks offer more graphic presentations to allow for a rapid response to market developments.
The use of candlestick trading techniques in conjunction with other technical analysis indicators, such as pivot points, only helps to improve investing results.
Pivot points are judiciously used by traders in order to identify strategic support the resistance levels.
Pivot points represent important support and resistance trading areas, where the likelihood of a reversal in price movement is greatest.
It offers the opportunity for an investor to take on a position with a high probability of success.
Pivot points have traditionally been used both when trading a range, or looking for a breakout.
When used for range trading, pivot points identify levels where reversals will occur. Breakout traders, on the other hand, recognize these key levels as the point where trading activity needs to penetrate in order to signal a true breakout has occurred.
Upon the identification of support and resistance levels through pivot point calculations, one has determined the various support and resistance levels for which an investor should consider trade entry or exit.
Only upon prices reaching a certain pivot point level should the individual trader determine the proper position to undertake, regardless if it is long or short.
Overall, trading below a pivot point level is considered a bearish indicator, while trading above is considered bullish.
So, the knowledge of pivot points and their successful use can be very handy for any trader and they can actually gain some extra profit using them.