Pivot Points

Pivot points are the level at which market movement changes from positive to negative or vice versa. If the market breaks through this area towards the upside, it will be said that this is a positive movement on that day and is likely to continue rising and on the other hand, if the price falls below this level, the movement is considered negative, and it is expected to continue to decline.

Pivot points are taken into consideration first during trading because they are strategic for the price support or resistance point, and the biggest price movement is after entering into the transaction in those pivot points.

When the price is at the pivot point, you will have the ability to make the right decision, whether to buy or sell, and pending orders are also placed. In general, if the prices are above the pivot point, this leads to the expectation of a price increase, but if the prices are below the pivot point, this leads to expectation prices drop.

Pivot points come as an indicator in technical analysis tools that is calculated using the highest price, lowest price and closing price of the financial instrument.

The common types of pivot points are traditional, Fibonacci, Woody, Classic, Camarilla and Demark, and each type has its own calculation method and pivot levels can play opposite roles as well, turning old resistance into new support once it is breached and vice versa.


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