It is amazing just how predictive these pivot points are. Check out the following charts and notice just how price reacts to these points, here you can see how price opened for the day and ran up to the central pivot point where it formed an enormous Doji and then reversed and dropped like a brick all the way back down to the previous low.
Note how price was unable to close above the central pivot point and then just collapsed back down to the most recent significant support level.
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The price action that followed was just as impressive. Look how price consolidated at the support level of 1.4240 and see how price formed a bullish engulfing pattern followed buy an inside bar. The combination of these two patterns and the support level should be enough for any trader to take a long position.
The action that followed was even more impressive, price ran up and through the central pivot only to retest the pivot level and then run straight up to S1 for a total distance traveled of 220 pips. For these levels to hold so well it tells me that there must be an awful lot of traders using these levels and I would hazard a guess that many of these traders are trading quite substantial accounts.
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My goal here is to ride on the shirt tails of these traders. I don’t have to capture the whole move only a piece of it. These levels definitely help with the decision making process when it comes to deciding whether to take a trade and also where to take profits.
Trade Well
Perry
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