Many traders like to use pivot points and animated averages but make fatal mistakes and don't use them correctly, which ensures the indicators which can help their profitability easily causes them losses.
If you are using these indicators or thinking of using them, then learn now to use them correctly.
Here are some tips that will help you use these indicators correctly.
1. Don't use them on meaningless data
More traders than ever are day trading and their losing.
The speculate why is straightforward the time frame is to short and all volatility in daily periods is random and therefore No technical indicator will give you any advantage, pivot points, animated averages, or any other indicator can help you make profits.
Ever seen a day trading vendor who has real time track narrative of profits?
You won't!
Because it doesn't work, volatility can and does, go everywhere in a day and traders lose - it's as straightforward as that.
2. You can't time entries with them!
Moving averages define the longer term trend; pivot points indicate points of rotation by definition, so they are telling you where prices may find sustain or resistance - nothing more.
Many traders like to naturally wait for prices to reach the levels and enter their trades and then hope prices turn in the direction they anticipating, but if you rely on "hope" you will lose.
Never trade on "hope" trade with the odds in your favour.
This means when prices move towards the price levels you are seeing at, you need to get the odds in your favour and that means combining them with momentum indicators to time your trading signals with the risk to repaymen I your favour.
You need evidence that price momentum is indicating the levels will hold.
If for example, prices move to sustain and price momentum turns up, you have the odds in your favour that sustain will hold and you can execute your trading signals.
Good momentum indicators are ones such as, the stochastic and Relative drive Index (Rsi) and if used with pivot points or animated averages, you have a marvelous combination.
It's all about combining indicators for profit - no indicator works on its own, so you need indicators that complement each other.
The Biggest Mistake any Trader Can Make.
Is to try and "predict" market direction. Most day traders do this as accepted and most citizen who use pivot points and animated averages, who try and execute trading signals with them are doing the same.
You can't predict turning points so don't try - act on confirmation and you will increase your odds of success dramatically.
Keep in mind trading is an odds game not a game of guessing, hoping or predicting - if you remember that and use it to your benefit you can avoid a fatal mistake most forex traders make.
Best Forex Indicators - 2 beloved Indicators and Fatal Mistakes Most Traders Make
