thefxpivotpoint.com

Questions and Answers

What are pivot points?

Support and resistance levels that allow traders to predict where price may turn.

Is any one support level more important than the others?

The most important level is the pivot point. It determines the direction we place our bias for the day. If the price is above the pivot point where are looking to go long. If price is below the pivot point we are looking to go short.

What are psychological levels?

These are levels where orders may be triggered by larger market players.  They are hidden support and resistance levels. For example - any level that ends with two 00. (Example: 1.4000) In concert with pivot points I use these levels to determine stops and take profit areas.

What's a trend?

All markets move in three directions. Up, down or sideways. A trend is simply the tendency of a currency (in our case) to move in a certain direction for a period of time. In the FX market that period of time can be quite long.

Do you use indicators?

I want to find where the price is going not where it's been. Many traders use indicators to predict market action. I've found most indicators are lagging and prefer pivot points. I'm not saying that indicators don't work - I prefer the 4 point strategy outlined on this site.

What's a PIP?

PIP is an acronym and it stands for Price Interest Point. Traders often measure their success in either PIPS gained or percentage gain.

Do you field questions?

I'll try to answer any questions you may have but will readily admit I'm not a currency prognosticators - I'm a trader so any questions should be purely technical in nature. I don't try to predict currency direction I simply act in response to it.

Describe your system?

I employ four methods:

                   1) Pivot Point Analysis

                   2) Psychological Pivot Levels

                   3) Trending Analysis

                   4) Fibonacci Levels

I know very little about fundamental analysis and as stated above use no indicators other than the four tools mentioned above.

How many PIPS do you make on average?

I don't have PIP targets. I take what the market gives me. Some months are better than others.  A sure way to lose money trading is to set up unrealistic expectations. It's good to have goals but it's much more important to be realistic about your results. After each month I analyze my trades. Please check out my Videos and look at Videos and Analysis section.

Is there a single important aspect to your approach?

The hardest part of trading is patience. (Assuming you already know the most important points of trading. Click Here) There are days I don't trade. Once you have your session strategy in place patiently waiting for the entry can be very frustrating. Even more frustrating is having a great set up with everything telling you to enter only to watch the trade immediately go against you. To be successful you must be able to put it all together and this includes knowing when to stay out.

How do you prepare your trading day?

The first thing I do is to determine where the price is in relation to the pivot point. If it's below the pivot point then my bias is to sell, if it's above our bias is to buy. Secondly I look at any micro-trend that may have been established over the last few sessions. I take a look at the daily chart to check the long term direction. Thirdly, I look at the news releases slated for the day and their release times.  Additionally, what is their anticipated impact?  Lastly, I set up my trading plan for the session.  What level will I enter and exit and why? At first this may appear daunting but in reality all of this takes less than ten minutes to complete. 

Do you ever trade outside of the peak hours?

Nope. Keep in mind that ALL of the retail traders in the world only account for 14% of the overall trading volume. We are mere ticks on the backs of elephants. When the elephant moves I want to be on his back not standing in front of him. The Forex Elephant only moves between 2:00am and 11:30am EST. This covers the European Elephants and the American Elephants which are the largest and most important pachyderms.

How often do you trade?

When the system tells us to. I won't churn. I create a plan prior to trading. Let the market come to you. Entries and exists are planned before the trading session begins. I've found that not forcing trades significantly increases my hit rate thus increasing my account size.

Note: The Foreign Exchange market is the largest financial market in the world with an average daily turnover of 2 trillion dollars. It is thirty times larger than the combined volume of all US equity markets.

Disclaimer: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors.  Prior to trading any instrument you should carefully consider your level of experience and risk appetite. Do NOT trade based on recommendations from this site. We show you how to think for yourself. If you lose money be man or woman enough to accept responsibility for your own actions   

Quote: Stephen Wright

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