presence of turning points in the Forex - a very important fact that forex speculator can use for their own purposes - for profit.
pivot - the price (the price level), reaching which, the exchange rate, the traffic moves in a certain trend (upward or downward), leaning to one of the following possible scenarios for its future behavior:
- - deceleration trend thatunequivocally supported by data, "candle" and "indicator" analysis;
- - entering the market "in the flat", ie the movement of the course in a limited, very narrow "corridor" with no clearly defined vector;
- - market turn and move in the opposite trend vector that can mean the obvious correction of the trend, and the relatively short-term "rollback" to the possibility of the resumption of the exchange rate on the previously prevailing trend to the same pivot (then be a repetition of the same scenario).
In most cases, a characteristic symptom of the exchange rate staying in the vicinity of the pivot point can be considered its oscillatory movement in an extremely narrow range.Such limited fluctuations can generally be observed within certain price markers that can be identified as a possible turning point, read more about them on the forex news online.
existence of the phenomenon of turning points due to the presence at the market a certain memory.For example, in the past there have been any events that have affected the market in a way that he was forced to stop its movement in a particular direction, change it to the opposite direction, or by clicking "in the flat."Subsequently, these "accidents" will associate the "trend" of the market with certain price levels that were reached them at the very moment when such "incident" took place to be.In other words, the market is a kind of "psychological binding" to certain price mark at which its "trending" movement will lose the previous confidence.
Reaching a pivot point, the market as it faces a choice: either once again succumb to "complex" of the past, or is it to overcome the "psychological barrier" and continue the trend.As a rule, the market can implement "break through" the turning point in two situations:
- - after a certain time has ceased to be a turning point psychological power over the market, it has become simply irrelevant;
- - on the market there have been new developments, which motivated him to overcome the fear associated with a specific point of the rotation.
trader task - to quickly identify market turning points with a view to taking appropriate trading decisions.For this can be used a variety of methods: a graphical analysis (identification of areas of "congestion pricing") signals Mathematical indicators and so on.
