Pivot Points

There are plenty of options for analysis to improve investing strategies when trading binary options. Within technical analysis, which forecasts future market movements by analyzing past movements, there is an indicator commonly referred to as pivot points. Pivot points are useful as a short-term barometer but still require investors to stay updated on a daily basis in regards to market movements.

Pivot points are very straight forward and easy to understand. They are extremely useful for traders at all levels, whether you are just starting out or have years of experience.

Pivot points show the average high, low and closing price of an asset from the previous trading day. Then on the following day, investors can make a better estimate of whether sentiment is towards a bear or bull market.

When trading is above the pivot point, it is considered a bull market, and when it’s below, a bear market. They can be used as a forecasting tool and make predictions based on past market movements.

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Utilizing pivot points is useful for all types of trading, including stocks, commodities, forex and indices. There are various methods for determining pivot points, but the most commonly used way is called the five-point system. This method uses a formula that includes the pivot, resistance (high/ceiling) levels and support (low/floor) levels. Additionally, some charts and formulas will include the opening price.

As with any type of analytical strategy, the success depends primarily on the trader and their ability to understand, calculate and implement the available analysis. For example, to help with developing and refining trading strategies, broker FinMax offers various useful online links and has a unique Education Center with interactive webinars, eBooks, trading guides and videos available on demand.

In addition to the Education Center, FinMax has charts and other indicators available for traders directly on the site’s trading page. Tendency indicators include Trader’s Choice (percentage up or down), Moving Average (MA), Relative Strength Index (RSI) and Bollinger Bands (volatility above and below the morning average).

By combining the use of pivot points and the array of online tools available on finmax.com, traders can make informed decisions and increase the chances of profitable investments. Pivot points are a great place to start and an easy way to get a better idea of market forecasts and trends.

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