IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 83.31%, while traders in AUD/JPY are...strategy could very well be a trader’s best friend as far as identifying levels to develop a bias, place stops and identify potential profit targets for a trade.
Traders simply took the high, low, and closing price from the previous period and divided by three to find the ‘pivot.’ From this pivot, traders would then base their calculations for three support, and three resistance levels.techniques. Price tends to respect these levels as they do with support and resistance. Pivot point price levels are recurrently tested which further substantiates these levels.
The chart below depicts a weekly chart with the addition of the pivot point only . It is clear there has been a trend reversal to the upside which is evident after the price breaks through the previous pivot resistance. Traders may attempt to look at breaks of each support or resistance level as an opportunity to enter a trade in a fast-moving market. This can be particularly relevant for longer-term pivot levels, with focus being paid to the weekly and monthly pivot points. The charts below will show how a trader can set up a pivot point breakout strategy using firstly the pivot alone as an indication as well as the more complex support and resistance levels.
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Source: DailyFX - 🏆 305. / 63 Read more »