The majority of small investors believe in market timing and buy-low and sell-high theories. Besides this, various sectors of our industry and economy perform low and high and market timing can not be judged by anyone, therefore, the best approach for small investors is to invest in all sectors of industry. It is not possible for small investors. So small investor needs some means to invest in all sectors of industry.
Exchange-Traded Funds or ETFs serve this purpose. Exchange-Traded Funds track indexes like S&P; 500, Dow Jones Industrial, or Russell 2000. Check for ETFs that invest in a large range of funds.
Technical indicators like Pivot points are often underrated. They were used by floor traders to note possible areas of resistance or support before commencing the day’s trade. Pivot numbers are now made available online to forex traders to use by plotting them on their trading platform to trade profitably. Without pivot numbers, it is like flying a plane with no compass or map, so these points are very important. The question for a newbie forex trader will be how to use the pivot point to trade the forex market. Listed below are three effective pivot point trading strategies that anyone can use.
1. Pivot breakouts: You can use this strategy only when the current price moves close to the pivot number, and tries to break it. Before placing any order watch the behavior of price around the resistance or support number, if the price decides to break through that pivot, then you should place your stop loss on the other side of the number that was penetrated and you should normally target the next pivot point for profit.
2. Pivot Bounce: If you watch price in relation to the pivot number and you see price hitting a particular pivot more often, and it is unable to penetrate that pivot. Then we have a bounce. You should place a sell order if for example the bounce happened at a resistance number and your stop loss should be above that pivot point.
3. Pivot point combination: This strategy is the most effective of them all because you use it in combination with other indicators of your choice to confirm if the price has truly broken through a pivot. You can plot two moving averages, MACD indicator, and stochastic and relative strength index to confirm before you place your trades. This is an advanced form of trading that is very profitable if used well with discipline.
The pivot point is very effective and reliable in the stock market that can be used alongside other indicators and you can be sure of raking in some profit before the end of the day’s trading is over.
Not studying enough stock market-related subjects and not understanding your trading terminal can lead to severe losses for small investors. Jumping directly to the terminal without getting the feeling of how the trading terminal works is not advisable. profitable traders use several keyboard shortcuts that help them to immediately exit positions during loss. Also, Without knowing supply and chain management, it is suicidal to invest in the stock market. It is recommended to read books on how the supply chain works.