FX Education: Trading Strategy based on Pivot Point (Part 1)
By Roger Baettig | August 24, 2012 6:19 AM EST
In my trading I am following a Pivot Point Strategy. I compare every day in the early morning at a certain time the Pivot Point with the previous day close. According to that comparison I open a Pending Order. That's it, that's all I do for my trading.
Let me explain.
This is an ordinary green candle:
This is an ordinary red candle:
So where does the Pivot Point come into the game?
Definition Pivot Point
Pivot Point = (High + Low + Close) / 3
But what does that mean?
Now you might say the candle was red anyway, so we knew already that it is bearish. That is only half true. The candle is read because it closed below the Open. But this doesn't mean that the candle was bearish.
Let's see another example:
What about this candle? It is green. But like the candle before it is bearish, because the close was below the Pivot Point.
But why is this candle bearish?
And that is the whole point of the Pivot Point Strategy. I just compare the Pivot Point with the Close of the daily candle yesterday.
If the Close was above the Pivot Point, it will by a bullish day. If the Close was below the Pivot Point, it will be a bearish day.
To contact the editor, e-mail:
Most Popular Slideshows
- Kate Middleton First Official Solo Trip: Details For Malta Tour Revealed [PHOTOS]
- 2014 MTV Video Music Awards: Full List Of Winners, Miley Cyrus ‘Wrecking Ball’ Bags Video Of The Year [PHOTOS]
- Manny Pacquiao Vs. Chris Algieri World Tour Kick Off Press Conference In Macau [PHOTOS]
- Kate Middleton’s Mom Accused Of Being A Social Climber, Prince George Not Seen By Relatives
Join the Conversation
- Apple on iPhone 6 Release Date One Week After September 9 Despite Display Shortage Starting $800
- James Foley Video Had A Change Of Actor – Expert Points Out
- Canada Concerned About Russia’s Military Expansion in Arctic
- Nokia X2 vs. Nokia Lumia 530 - Specifications, Features And Price Showdown
- Trending: Ice Bucket Challenge Replaced By Rubble Bucket Challenge By People Of Gaza
- US, Syria to Work Together to Vaporise ISIS
- European Central Bank Advises Action to Boost Demand and Employment In EU