Tomorrow I am conduction an Open Question-and-Answer Session. I invited 40-50 traders and asked them to submit their questions in advance so that we can use our time tomorrow in the most efficient way.

I received more than 20 questions, and one of the frequently asked question is

"How do I use Pivot Points in my day trading?"

Let's first of all answer the question "What ARE Pivot Points?"

When talking about Pivot Points, most traders refer to the so-called "5-point-system". This system uses the previous day's high (H), low (L) and close (C), along with two support levels (S1 and S2) and two resistance levels (R1 and R2). The pivot points are calculated as follows: