Forex Pivot Points: Top Profit Technique

There are a number of important techniques that can be used on Forex and many points that both present and potential investors should be conscience of, one of the most important involving Forex pivot points. Forex is the largest financial market in the world, and yet it is relatively unfamiliar terrain to retail traders.

Forex Pivot Points

Using pivot points as a trading strategy has been around for a very long time and was actually originally used by floor traders. The Forex pivot points refer to the levels at which the market direction changes for a day. Forex pivot points can be determined by doing some simple arithmetic using the previous days’ high, low and close.

One of the main reasons as to why these pivot points are so valuable is because they are predictive and therefore can help significantly in terms of an investor’s profit margin. Many traders these days monitor these pivot points and uses them to maximize profit. There are a few different formulas that can be used to compute the pivot points.

There are also a number different tools that can be used in conjunction with the formula in order to profit from Forex pivot points. There is the breakout trade, which is a type of trade in which the investor would have their sell entry order just below the lower channel line with a stop order just above the upper channel line and a target of S1.

There is also the pullback trade, in which the investor places an entry order below support and then a stop is placed above the pullback and a target set for S2. The breakout of resistance often is effective, and this is another very good set up for a trade.  Here an entry order is placed just above the upper channel line, with a stop just below the lower channel line and the first target would be the pivot line.

Benefits

In Forex trading, a small margin account can control a signicant amount of currency. There are a number of benefits that are offered by Forex trading, one being leverage. This leverage is what gives the trader the ability to make large profits while still keeping their risk capital small.

Forex trading is also available around the clock, as from Sunday evening to Friday afternoon EST the Forex market never sleeps, and this is very advantageous to those investors who want to trade on a part-time basis because then they are able to do it whenever they want, whenever they have the time. 

Forex Pivot Points are just some of the techniques you can find on my blog http://www.top-forex-secrets.com.  Also check out the GetLocalHelp.com community site to find help in your local area.