Forex Pivot Points How to use them effectively

A pivot point is a measurement of the previous price action, the most common pivot point is the daily pivot point.

These points will measure price action one set level to another set level, the pivot points will give you a series of measurements in between those two levels.

Traders refer to pivot points as reference points, the pivot point indicator will give you a central pivot level and 3 resistance levels above the central mark, the indicator will also provide 3 support levels below the central mark.
If the price action falls below the central point, this is referred to as the buying zone – from this we know that traders will be looking at these levels based on past performance whether that being daily pivots, weekly pivots or monthly to gauge how fair any specific pair had moved.
Vice versa for the pair going above the marked central pivot level, this is referred to as the selling zone and traders will looking at the marked out pivot points to sell into.

I do not trade pivot points blindly and only refer to them once I know which direction a specific pair is heading over a longer term time frame.

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