Pivot points are necessary indicators in Forex trading. Pair currency relations may turn out volatile at times and it is best to go through the motions taking cure from pivot points.
They are set for daily trading based on the performance of respective currencies at close the previous day. What were their lows and highs over the entire day period? For intraday trading, the pivot points are set for four hours again based on four previous four hours play of stocks.
They are set by highly qualified analysts who know where the bucket may shoot. Obviously an instant emergency occurrence in any country that the currency resides in will affect the pivot points. They give the key plots on which you can base your stop and limit order.
They are indicators only and not the final word. Investors are advised to throw caution and make their own studies while investing in Forex stocks.