What is a pivot point

A pivot point is a crucial technical indicator used in trading to identify potential levels of support and resistance. It’s calculated based on the previous day’s high, low, and closing prices. Pivot points help traders gauge market sentiment and determine key levels where price action may reverse or stall. Additionally, pivot points provide insights into market trends and can be used to set entry and exit points for trades. By understanding how to calculate and interpret pivot points, traders can make more informed decisions and enhance their trading strategies. Incorporating pivot points into your analysis can improve your ability to identify profitable trading opportunities and effectively manage risk in dynamic market conditions.