Every trader should know what a pivot point is. It comes as the core element of various baseline strategies when using technical analysis and various trading charts. Generally, people who trade commodities or equity use a pivot point strategy that makes it possible to make accurate support and resistance level predictions. They help to identify potentially successful entry points, traders use pivot point trading rules to set stop-losses or limit orders, and so on.
However, a few beginners understand what a pivot point is and how it can be used under real-market conditions with a specific trading strategy.
Pivot point explained
With so many technical indicators, the pivot point is probably the major one, as it helps to define the future trend or price movement. Besides, it shows the situation on the market with the overbought or oversold environment. What's more, the indicator makes it easy to identify the trend, in addition to support and resistance levels.
Take a look at the pivot point example on MT4 chart (thin horizontal lines):