Pivots are cool
One tool that I use quite often from my handy forex tool box is the pivot point. It is somewhat controversial, many traders say they do not work. But I find it fascinating to plot the weekly pivot points on my charts and then watch how price interacts with those points. I guess that makes me a technical geek! But more often then not price respects the weekly pivot point, it will touch it and then bounce away, or hesitate before blowing through it. Often it will act as support and then resistance. If I am setting up a trade and see that the weekly pivot point is close by, I may wait to see how price interacts with the pivot before entering the trade. Or, if my target for my trade is near the weekly pivot, then I often just make the pivot my target. It acts like a magnet for price. Here is how you calculate the weekly pivot point: Take the last week’s high + the last week’s low + the last week’s close, then divide by 3. It is the average of these numbers.
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