It only makes sense to trade with pivot points as they represent price action past, whether that be 4hrs, 8hrs or 1 day past. Why would pivot points of price action past be useful - it allows the trader to see the strength of price action current. Price action generally trades between S1 R1 on the daily anything out of this range represents extreme price action. How can a trader tell when trend is turning, we use pivot trend lines. What are pivot trend lines - they are the true trend line off of the pivot point.
Euro is at extreme price on the daily pivots at S3 but still below the 8hr pivot and daily pivot, but we can also say euro is not in a position to consider a long as it is below the 8hr trend and daily trend.
- the past two images are looking and playing the currency from a longer perspective alternatively you can change the pivot to 2hrs place a trend on it - what we are looking for is a higher 2hr pivot then last pivot - if you take the trade up be aware the 8hr and daily pivot are above with their trends
Here is the pound with the same timeframe and pivots as euro for short trading - you can see pound is at the 2hr pivot and we have the trend sitting just above
So now we have price sitting on top of the 2hr pivot with trend just above - looking for break above trend and target the three obvious places where price fell away from
I will circle back to euro and pound - just wanted to look at UCad here - it broke trend on the daily and 8hr last night - going up it will have difficulties going through the two trends above and the daily pivot - until it breaks those trends they will serve as opportunities to short from
Lets have a longer look at euro - it also broke the 8hr trend and daily trend last night - as long as euro sits on top of the trends it remains bullish - the trends are dynamic they change pitch and at times direction with the new pivot point - as we saw on the 8hr trend - I think the trends everybody understands so targets and stops. Lets see what we can do with the pound
Here is the pound - obviously still below all pivots and trends - when price is falling you can bet it will go to S1 then jump back to the daily pivot then fall away below the supports S1 S2 S3 - now if it falls to S3 we should get a knee jerk reaction - price will gravitate back to the daily pivot - whether it is S3 or R3. Pound is at an interesting place - has not made a lower low. Price did gravitate back to the daily pivot from price touching S3 yesterday plus our *hr pivot is sitting above the daily pivot and is higher then last 8hr pivot - this is worth a watch to see if it will break above the 8 hr trend.
So the targets for price falling is always short from the daily pivot take profits at S1 - only short if it is below the daily and 8 hr trends(could use 4hr). My stop is the opposing R1 S1 - it is not likely to break or take your SL out - the exception to that rule is the first change around day - price heads back to the old R1 S1…I do not why but it does.
Here is Yen - it is at a cross road below the 8 and daily trend and just below the daily pivot - as long as it is below it is bearish - my target would be S1 below at 120.99 - if it breaks above then I would be looking for R1 at 121.59 - right now I am short till it breaks above the trends and daily pivot
For the currencies to run up alittle we want the US Dollar to stay below the daily trend - even better below the daily pivot - we are looking for S1 below
