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The daily pivot points are one of the most accurate PP levels because they incorporate the end of day closing prices.

Let me explain why daily pivot points are so powerful.

The close of the day is regarded as the most important price of all OHLC prices. The closing price is basically the settlement price that shows who won the bull-bear battle.

So, the bottom line is this:

Daily pivot points are more reliable than intraday pivot points.

If you day trade with pivot points make sure you go to settings and change the timeframe of the pivot points to daily. This way no matter if you’re looking at a 5-minute chart, or 1-hour chart, the pivot points you’ll see are calculated based on the daily OHLC prices.

Now…

Here is a trading edge to use the daily pivot points.

See below:

Using Daily Pivot Points to Boost Forex Trading Strategy

The most powerful way to trade daily pivot points is to look after rejections of the central pivot point.

Let me explain this type of pivot point trade setup:

If during the trading day the market has established a strong bias above (below) the central pivot point we should expect any retest of the central PP to provide a rejection.

Here’s why…

Let’s assume the market traded above the central pivot point for the most part of the day.

Maybe a piece of bad news hits the market and the price starts to fall and retest the central pivot point.

At this point, we would expect the buyers to show up again and defend their position in the market. So, if the buyers were really in control, we can expect a bounce.

This is a great chance to re-enter the market if you have missed the initial start during the day.

Here is an example: