Sponsored Post
We can't trade all day long (and don't necessarily want to), but we can make the most out of the time we get.
However, when you start delving deeper into the Forex markets, you begin to see just how much there is to process. Reams of new data coming in every single hour. An indefinable number of factors influencing every currency. And so, we use indicators.
Indicators are shortcuts to determine Forex trends without sifting through all the data. If you use MetaTrader 4 (MT4) as your trading platform, you'll have access to loads of Forex tools, including the best pivot point indicator.
What is a pivot point indicator?
When it comes to technical analysis, the core concepts of support and resistance are crucial. These are levels expected to be key battlegrounds in the tension between bear markets and bull markets.
The importance of these levels is that, as the market approaches them, traders can predict either price rebounds or breakouts. In other words, they indicate that significant movement is on the cards.
Therefore, identifying these price levels is not only useful, but crucial if you are to optimise your time.
The pivot point indicator does just that. It takes standard price information and uses it to project support and resistance levels.
How to use pivot points
There are many ways to calculate pivot points, including the Fibonacci and DeMark methods. Regardless of how they are calculated, they can be used in 3 key ways.
● gauging general direction. You can identify a bullish market if the prevailing price is above the base pivot point and vice versa
● inform your trading. You can choose to take a long position when support and resistance levels indicate a bullish market and vice versa
● opening positions. Finally, you can use support and resistance levels to indicate when to open positions
One among many
Of course, the pivot point indicator is just one among many tools to analyse the Forex market. With a platform like MetaTrader 4, you don't have to spend hours doing calculations. Your trades can be more than "educated guesses".
MetaTrader 4, with every possible indicator, will be available when you choose the best Forex and CFD broker. Importantly, you will be able to test the different options in a demo trading account. The risk-free practice trading will help you learn "on the job" without losing all your money.
And ultimately, you won't know how indicators work until you've tried them. Theory and practice are not always the same thing. This is especially so when you start using a range of tools to make your trades.
The pivot point indicator will help you optimise your time spent trading Forex, so that you can make money even when you're trading part time.
