Use of PP,R1 and S1 pivots

Hi,

I have been plotting these on my FX charts and observing price patterns. I would be very interested to learn how people trade these, especially:

1. Do you Buy/Sell on breaks of the lines?

2. How you minimise whipsaws (ie. breakout from the line, then retracement to stop loss).

Thanks,
Alex

I have found that WEEKLY pivots do work as levels of support/resistance, at least temporarily, but I was unable to find a sensible usage for them to profit consistently from them, so I stopped used them.

Also, I noticed that when I cloud my charts with too many lines, my analysis quality suffers greatly, so now a days I only use the most significants elements of my system and I eliminate the tidbits out of the equation.

I use the daily, weekly and monthly pivots. A confluence of pivots can provide some great areas for bounces.

As for the daily pivots, my bias is usually long once price breaks above the central PP and short below. Very often price will break through a pivot, then come back down to test it. This provides an excellent place to make a trade. Your price target could be the next pivot or the midpoint.

I look mainly other technical indicators as well. But mainly fundamentals effect too.

Using pivot points was a mainstay of my first forex course.

I stopped using them after a month or two, they did not work, used as I was taught.

I've since seen several other methods of calculating them, so that might be part of the problem.

My thinking is, if you get enough lines on a chart, you can convince yourself of anything.

Mostly how I use them as well. I seldom trade off them independently. I look to them to provide additional support and resistance giving that area more validity as support or resistance.

1: if additional S/R are in the area and price supports the move then yes I would. Although on lower time frames I do occasionally use them with price and the macd/stochastic without other S/R, but it depends on the situation and is considered a more risky trade for me. Lower time frame for me would be 1-15 minute charts. Lately though I seldom trade the lower time frames, not that I can't make good trades off them, they just tend to be more time consuming and you really need specific conditions for them to be worth the effort.

2: using additional support and resistance, trend lines, previous high/lows, round numbers (100,200 etc.) fibs, Ma's and what ever else may provide S/R. Not a sure fire method, but it does reduce the chance of it turning against you and gives you clearer line in the sand to draw. Often the greater the S/R the better the bounce or break you'll get.

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