Pivot points are a technique used by floor traders to determine entry and exit points for the trading day based on the last day’s trading activity. Off-floor traders can take advantage of the pivot and support and resistance levels to determine when to enter and exit a trade. Pivot points are especially useful to short-term traders who are looking to take advantage of small price movements. It is best to use this technique after determining the direction of the trend. Keep two things in mind, both of which should be familiar to traders: Cut your losses, ride your profits, and Don’t trade against the trend!
Source: Jayanthi Gopalakrishnan
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