With FOREX trading determining pivot levels begins with the calculation of the actual pivot point, which is simply the sum of the previous days high, low, and closing price. If the market opens or later trades at the extremes R2 or S2, pricing will exhibit a tendency to trade back toward the pivot point. Hence, FOREX traders tend to avoid buying high (at R2) or selling at the low (S2). The wisdom of this is even greater the further the price moves away from the day's pivot point.
High probability trading is the key to longevity as a FOREX trader. Trading reversal patterns given by price reaching the extremes of support and resistence levels means that you are giving yourself the highest possible probability of success.
There are many areas trading the FOREX benefits from as opposed to other financial markets available to retail traders. FOREX is such a vast global entity that it is very hard to manipulate the market and so it remains one of the most, if not the most tradable and profitable markets available to you and I.
Happy and successful trading
Annabel
www.tradeforexfromhome.com
16 years ago
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