Day Trading Currencies With Pivot Points
Many day trading systems rely on pivot points to determine where the market may go next and believe that these indicate important points of support and resistance that can be acted upon for profit.
Let's take a look at them in more detail.
A pivot point is a point of rotation hence the name.
Pivot points are support and resistance levels derived from the previous period's high, low, and closing values.
The period by day traders in currencies is normally taken from the daily chart or from the hourly chart.
You can also combine pivot points with traditional support and resistance techniques to enter and exit trades
In simple terms a pivot point is used to denote support and resistance within the period traded.
So do they work in day and intra-day trading?
I have never seen anyone make long term profits with them.
I see lots of vendors of systems that claim they do, but never seen a track record of real time profits.
Fact is this has to be one of the stupidest ways to trade.
How can you accurately predict where prices are going to go in such a short time period?
Pivot points are of no use whatsoever in a short time frame.
Think about it.
Trillions of dollars are traded each day by many millions of participants and most of these are not interested in daily or intra day action and pay no attention to it.
The ones who do, tend to be the mug speculators who think day trading works and of course it doesn't.
To make money with any form of technical trading you need to have data that you can use that can help you get the odds in your favor.
Daily or intra day pivot points don't help you do that.
It looks good as theory on paper, but try it in the market and you will lose your equity longer term.
TRY THIS SIMPLE TEST
If any vendor tries to sell you a system based upon pivot points, ask them for their real time track record of profits over the long term and see if you get one.
Related Tags: day trading, daytrading, day trading systems, forex day array trading systems, pivot points
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