The term “trading tools” covers a wide variety of applications and utilities with the purpose of assisting a trader / investor in making and implementing is investment decisions.
Using a carefully selected quality trading tools which complement our trading style by alerting us to higher probability trading opportunities, facilitating a fast and easy execution of trades will improve our trading results.
One of my tools is the Pivot Points indicator, based on my trading style that is Day trading.
What is the Pivot Point indicator?
Pivots Points are significant levels that technical analysts can use to determine directional movement, support and resistance. The Pivot Points are considered as predictive or leading indicators.
There are at least five different versions of Pivot Points. I use the classic version but there are Woodie’s, DeMark’s, Camarilla and Fibonacci Pivot Points.
How to use the Pivot Point indicator?
The simplest way to use pivot point levels in our trading is to use them just like regular support and resistance levels and for a good support and resistance level price should test the levels repeatedly.
The more times the price touches a pivot level and then reverses, the stronger the level is. If you see that a pivot level is holding, this could give you some good trading opportunities.
A move above the Pivot Point suggests strength with a target to the first resistance. A break above first resistance shows even more strength with a target to the second resistance level.
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