Pivot points are a quick method of assessing trend and likely levels of support or resistance – they’re not all you’ll ever need to know, just another weapon in the forex armory, particularly useful in the short-term.

We’ve added to a pivot point calculator to our free tools section – at the moment, just for standard (floor) pivot points – the more exotic formulae, De Mark pivots, the Camarilla system, will be following shortly.

There’s 2 ways of using pivot points.

1. Overall market trend analysis: – if the price crosses above the pivot point level, then it’s fair to say the market is in a bullish phase. And vice-versa, price breaks the pivot point level to the downside = bearish.

2. As entry/exit signals: – since the theory is that pivot points are likely support/resistance levels, these can be used as limits on trades placed – eg a conditional order to buy/sell if the price breaks through a given level of resistance/support. Similarly, likely exit points for placing stops- stop-loss orders, or even, just maybe, take profit…