Range Trading with Pivot Points.

Let’s continue our example from yesterday on range trading with pivot points.

As for your take-profit points, you could target PP or R1, which could also provide some sort of resistance.

Let’s see what would happen if you bought at the market.

And bam! It looks like S1 held as support!

What’s more, if you had targeted PP as your take-profit point, you would have hit your PT!

Of course, it isn’t always that simple.

Considering More Than Just Pivot Point Levels

You shouldn’t rely only on the pivot point levels.

You should note whether pivot point levels line up with former support and resistance levels.

You can also incorporate candlestick analysis and other types of indicators to help give you more confirmation.

For example, if you see that a doji has formed over S1, or that the stochastic is indicating oversold conditions, then the odds are higher than S1 will hold as support.

Also, most of the time, trading normally takes place between the first support and resistance levels.

Occasionally, the price will test the second level and every once in a while, the third level will be tested.

Lastly, you should also fully understand that sometimes, the price will just break through all the levels.

What will you do when that happens?

Continue to hold on to your trade and be a sucker and watch your account dwindle away? Or will you take advantage and get back some pips?

In the next lesson, we’ll teach you how to take advantage of when these levels break down.

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