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I would like to ask one question regarding support and resistance. If I was to analyze the markets and look for support and resistance levels, should I observe past events to predict the future?
From my understanding pivot points are not derived from past information? |
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I think you got it mixed up tradergap. The market is one big auction place of human emotions. Human behavior repeats itself. That is why price patterns still work to this day.
Pivot points are also data derived from the past. You take the previous days close, high, and low to come up with daily pivots. This is still past data.
Key support and resistance levels with high volume can act as key reversal points. Try learning crowd behavior and you will have a better understanding of market psychology. One of my favorite crowd psychology books is,
The Crowd by Gustave Le Bon.
