As you well know, there is no shortage of daily forex signals in the trading market, as this market is extremely volatile, allowing for investments even in the short term and within the same day.
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Daily trading signals can be easily utilized even by less experienced traders, provided they are simple to interpret. Various trading signals can be used, but the absolute simplest is the one related to daily pivot point levels.
Pivot point levels represent resistances and supports calculated based on the average price of the previous session. Fortunately, with modern trading platforms, there’s no need to calculate pivot points; you just need to set this indicator, which is usually pre-set.
HOW TO USE PIVOT POINTS
Pivot points are divided into two main categories:
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- Resistance pivot points;
- Support pivot points.
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These levels behave exactly like daily support and resistance levels and are very reliable. There are generally two resistance pivot point levels and two support pivot point levels, which are graphically plotted as shown in the following image.
The price tends to behave in two different ways near these areas:Â
Resistance pivot points: when the price reaches the first resistance pivot point, it can either bounce back and reverse its course or continue until it reaches, in most cases, the second resistance pivot point.Â
Support pivot points: in this case too, the price can either bounce back and reverse its course or break through the first pivot point to reach the second.Â
Trading signals are therefore very simple to use:
Open long positions when the price bounces off a support pivot point or breaks through a resistance pivot point.
Open short positions when the price bounces off a resistance pivot point or breaks through a support pivot point.
For more information, we recommend www.forex-facile.it.Â
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