Pivot or turning points is a technique used by many forex traders in order to determine the current price position in comparison with the earlier market action. Pivot point is referred to the level when the market sentiment changes from bear to bull or bull to bear. If the market moves upwards breaking the level, then the sentiment is considered to be bullish and the price is more likely to move in upward direction, but if the market moves down breaking the level, then the sentiment is considered bearish and the price is expected to move down further. Pivot points also considered as support or resistance levels when the market fails to break it. They are used by traders in determining the strength and weakness of the market.

FXMan, very correct post! The reason pivot points are so popular is that they are predictive as opposed to most lagging technical indicators. A trader can use the information of the previous day to calculate potential market turning points for the current day. Not surprisingly, the market reacts as price reaches pivot point levels because so many traders follow this technique.

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Ha, this is true for almost every strategy and technique when it becames popular. Everyone thinks that he the most clever trader and uses it...

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