What is the Pivot Point Super trend?
Pivot Point Supertrend is a technical analysis tool used by many forex traders to identify potential trend reversals and entry/exit points in the market. This indicator is based on the combination of two different indicators, the Pivot Points and the Supertrend, which work together to provide a comprehensive analysis of the market. Pivot Points are levels calculated based on the previous day’s high, low and close prices, while Supertrend is a trend-following indicator that helps traders to identify the direction of the trend. By using the Pivot Point Supertrend, forex traders can better understand the current market trends and make informed decisions about when to buy or sell. In this article, we will explore how to use Pivot Point Supertrend in forex trading and its potential benefits.
Get Instant Access To Free Forex Systems
Enter your email below to access and download hundreds of FREE Forex Strategies.
Pivot Point Super trend Strategy
Here’s a strategy using the Pivot Point Supertrend indicator for forex trading:
- Determine the trend direction: The first step is to determine the overall trend direction of the currency pair you are trading. You can use the Supertrend indicator to do this. If the Supertrend line is above the price, the trend is considered to be bullish. Conversely, if the Supertrend line is below the price, the trend is considered to be bearish.
- Identify key support and resistance levels: Next, use the Pivot Point indicator to identify key support and resistance levels for the currency pair you are trading. Pivot Points are calculated based on the previous day’s high, low and close prices, and can help you identify potential turning points in the market.
- Look for entry signals: Once you have determined the trend direction and identified key support and resistance levels, look for entry signals. A buy signal occurs when the price breaks above the Pivot Point resistance level, and the Supertrend line is above the price. Conversely, a sell signal occurs when the price breaks below the Pivot Point support level, and the Supertrend line is below the price.
Buy Signal
Here’s a list of details for a buy signal using the Pivot Point Supertrend indicator:
- The Supertrend line is above the price, indicating a bullish trend.
- The price breaks above the Pivot Point resistance level, indicating a potential breakout.
- The Supertrend line remains above the price after the breakout, confirming the bullish trend.
- A buy order can be placed at the breakout point or on a pullback to the Pivot Point resistance level.
Sell Signal
Here’s a list of details for a sell signal using the Pivot Point Supertrend indicator:
- The Supertrend line is below the price, indicating a bearish trend.
- The price breaks below the Pivot Point support level, indicating a potential breakdown.
- The Supertrend line remains below the price after the breakdown, confirming the bearish trend.
- A sell order can be placed at the breakdown point or on a pullback to the Pivot Point support level.
Pivot Point Super trend Pros & Cons
Pros
- Easy to use: Pivot Point Supertrend is a relatively simple technical analysis tool that can be used by both novice and experienced traders.
- Identifies trend direction: The Supertrend component of the indicator helps traders to identify the direction of the trend, which can be useful in making trading decisions.
- Identifies key support and resistance levels: The Pivot Point component of the indicator can help traders to identify key support and resistance levels, which can be useful in determining entry and exit points.
- Can be used on multiple time frames: Pivot Point Supertrend can be used on different time frames, allowing traders to adapt to different market conditions.
Cons
- Can be lagging: Like any technical indicator, Pivot Point Supertrend can be lagging, meaning that it may not always provide timely signals for traders.
- Can produce false signals: Like any technical indicator, Pivot Point Supertrend can produce false signals, which can result in losing trades.
- Requires additional analysis: Pivot Point Supertrend is not a standalone trading system and requires additional analysis to confirm signals and manage risk.
- May not work in all market conditions: Pivot Point Supertrend may not work as well in choppy or ranging markets, which can make it difficult to determine trend direction and key support and resistance levels.
Conclusion
In conclusion, Pivot Point Supertrend can be a tool for forex traders looking to identify trends and key support and resistance levels. The indicator is easy to use and can be applied to multiple time frames, making it versatile for different market conditions. However, it’s important to keep in mind that Pivot Point Supertrend is not a standalone trading system and should be used in combination with technical analysis tools and proper risk management techniques. Additionally, the indicator may not work well in all market conditions and can produce false signals, so it’s important for traders to practice and backtest their strategies before using them in live trading.
I’m a self-confessed Forex geek who spends countless hours researching, testing, and reviewing everything related to trading. With many years of experience in the Forex industry—and thousands of robots, brokers, strategies, and courses put to the test—I’ve seen what works and what doesn’t. My goal is simple: to share that knowledge with you for free, so you can navigate the exciting (and sometimes crazy) world of Forex trading with more confidence.
