Forex Pivot Points Trading – Forex Trading Strategy Q&A

Welcome to the second installment on Forex Pivot Points.

In the first video we looked at the zones. The central pivot which is the pink line in the illustration here is the main pivot. R1, R2, R3 above it, that stands for resistance. Below we got S1 S2 S3 that stands for support. Basically what we’ve talked was that below the pivot is the buying zone and above the pivot is the selling zone.

Now in this video we are going to expand on that because we are going to look at the actual levels themselves. So how do you trade Forex pivot points? Well, if we just click down here, you can see, we’ve got the period separator. This white line going down here shows a new day. So everything to the right hand side to that line is a fresh day and that’s when the Forex pivot points were calculated. Before this line, on this price action here these pivots didn’t exist. That’s the crucial thing to bear in mind.

So how can you trade? Well, first of all what we want to do is we want to look for these pivots what prices they are. This central pivot here is a new fresh reason to buy from that particular price. However we don’t just want to buy because it’s there, we want to match it up with something else. We would need a fresh reason which is the pivot but also an old reason.

So you can see yesterday here, price came down and bounced off this level when that pivot didn’t exist and now it came back down to that level. So it’s not only that good old level where traders previously been buying. You also got the fresh pivot point as a new reason to buy. And if you just scroll down here you can see that S1 is exactly the same. Yesterday price came down bounced of it really strongly. Remember this S1 didn’t exist yesterday now we got the S1 there. So if this price comes back down you got the S1 as a fresh reason to buy from this price which was a really good buying level yesterday.

So that’s how you trade from Forex pivot points. You need a confluence, you need more than one reason in the correct zone.

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