I need explanation on Pivot Point

Beginner Questions
1

i use the candlestick formed yesterday on daily chart for GBP/USD to calculate for pivot point and get the following details

High: 1.5733
Low: 1.5578
Close: 1.5597

PP: 1.5636

R1: 1.5694
R2: 1.5791
R3: 1.5849

S1: 1.5539
S2: 1.5481
S3: 1.5384

Midpoints

PP: 1.55875

R1: 1.5665
R2: 1.57425
R3: 1.582

S1: 1.551
S2: 1.54325

i need explanation on how i can use pivot point details for predict the market.

thanks as you comment on this thread.

2

You could use it as an intraday trading filter, with the higher time frame in mind:

Price above the Central Pivot = Look for shorts in overall bearish environment
Price below the Central Pivot = Look for longs in overall bullish environment

Also, it may act as support & resistance, so you could look to take profit at Pivot levels.

3

thanks for your reply, with the details above where and how do you think the GBP/USD will head to for the rest of the day?
i’m trying to get a better understanding of it.

4

Using FXTraderCro’s simple formula from their post,

G/U opened below the PP, it is also in a downtrend therefore we would
be looking for for a short entry.

Maybe on a break of the mid-point between PP & S1 go short with a S/L
on the mid-point between PP & R1.

But it is Friday so be aware anything can & does happen after midday UK time.

5

thanks very much, i think i have some understanding now.

Basically, i am trying to build my trading system which can be traded on the hourly chart, when i am going through the school of pipsology, i learn that pivot is used by almost all the top traders, so i choose to build my trading strategy around it. thanks once more.

also, which other indicator do you think will be okay to use together with the pivot point in other not to get lot of fake-out.

6

Take a look through the thread below plus follow where it takes you.

http://forums.babypips.com/free-forex-trading-systems/6632-alternative-technical-templates.html

Try MACD or Stochs but make sure you understand fully how your choice works.

In the end you would be looking towards pure price action.

8

thanks once more, i appreciate your concern

9

I’m currently playing about with Mark Rose’s ‘three simple pivot point strategies’ - I’ll let you know how I get on!

10

okay, I’ll be waiting

11

No need just google "Mark Rose’s three simple pivot point strategies"
then follow the links.