Pivot point trading strategy

Pivot points are a technical analysis tool used by traders to identify potential support and resistance levels in the market. They are calculated using the high, low, and close prices of a specific time period, such as a day or a week.

There are several different methods for calculating pivot points, but the most common method is the five-point system, which includes the central pivot point (P) and four additional support and resistance levels (S1, S2, R1, and R2). These levels can be used as potential entry and exit points in the market.

Some traders also use pivot points as part of a larger trading strategy, combining them with other technical indicators or chart patterns to make more informed trading decisions. It is important to note that pivot points are a subjective tool and may not always accurately predict market movements. As with any trading strategy, it is important to carefully consider the risks and to use sound money management techniques.