What is a pivot point in trading?

A pivot point is an intraday technical indicator used to identify trends and reversals mainly in equities, commodities, and forex markets. Pivot points are calculated to determine levels in which the sentiment of the market could change from bullish to bearish, and vice-versa.

What is a pivot price?

A pivot is a significant price level known in advance which traders view as important and may make trading decisions around that level. As a technical indicator, a pivot price is similar to a resistance or support level. If the pivot level is exceeded, the price is expected to continue in that direction.

What are pivots & how do they work?

Pivots are also very popular in the forex market and can be an extremely useful tool for range-bound traders to identify points of entry and for trend traders and breakout traders to spot the key levels that need to be broken for a move to qualify as a breakout.

Can a pivot point be combined with other trend indicators?

Combining pivot points with other trend indicators is common practice with traders. A pivot point that also overlaps or converges with a 50-period or 200-period moving average (MA), or Fibonacci extension level, becomes a stronger support/resistance level.