Embrace the concept of pivot range and its significance in trading from "summary" of Secrets of a Pivot Boss by Franklin O. Ochoa
In trading, understanding the concept of the pivot range is crucial for success. The pivot range is a key level derived from the previous day's high, low, and close, and it serves as a critical reference point for market participants. By embracing the pivot range, traders can gain valuable insights into market sentiment and potential trading opportunities. The pivot range consists of three levels: the pivot point, the upper pivot range, and the lower pivot range. The pivot point is the central level, which represents the average of the previous day's high, low, and close. The upper pivot range is calculated by adding the high minus the low to the pivot point, while the lower pivot range is calculated by subtracting the high minus the low from the pivot point. These levels provide traders with a clear framework for understanding price action and making informed trading decisions. One of the key benefits of the pivot range is its ability to act as support and resistance levels. When price approaches the upper pivot range, it may encounter resistance and potentially reverse direction. Conversely, when price approaches the lower pivot range, it may find support and bounce higher. By using the pivot range as a guide, traders can effectively identify potential entry and exit points for their trades. Furthermore, the pivot range can also be used to determine the overall market bias. If price is trading above the pivot point, it is considered bullish, whereas if price is trading below the pivot point, it is considered bearish. This information can help traders align their trading strategies with the prevailing market trend and improve their chances of success.- The pivot range is a powerful tool that can enhance a trader's decision-making process and improve their overall trading performance. By embracing the concept of the pivot range and understanding its significance in trading, traders can gain a competitive edge in the market and achieve their financial goals.
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