Pivot Points

Pivot points are turning points in price movements. They are places where buyers or seller give up their positions, so they involve emotions. The more intense the emotions are, the more important the pivot points. At extreme cases, one pivot point, such as price spike or crash, might define the turning point for a secure long term trend. Most of cases, more than one pivot points connect to a trend line. The break of a trend line may decide the direction of a trend.

So pivot points and trend lines are important tools to use to decide the entry and exit of a trade. Here are three steps that Jesse Livemore used to enter his trades.

1. Watch the tape.


2. Establish your pivot points.


3. Be ready to trade along the line of least resistance.

Pivot points are easy to see in hindsight but difficult to spot when they are developing. It is even hard if you like to have information from media and your mind is strongly biased.

Keep your mind open, clear and objective, then pivot points and lines of least resistance come to you. you go with the flow.

Below are some charts with clear pivot points and lines of least resistacne. I feel disappointed I find them in hindsight but not they come to me natually.

Japanese Yen



Australian Dollar



Canadian Dollar