Some traders use the pivot numbers to estimate the upcoming high or low, or to simply identify a level at which a market might change direction on an intraday basis.
A popular pivot-point approach is to cover any short positions and go long at either of the two support levels, or sell any long positions and go short at the projected resistance levels. Accordingly, while these price levels provide points at which to enter or exit the market, they also indicate where not to make trades. For example, you should not buy just below either of the resistance levels.
It is beneficial to use multiple time frames — e.g., monthly, weekly, and daily — to identify multiple pivot point upport and resistance levels. A particular level has more significance when pivot points on two or more time frames coincide.
Combing pivot point levels with the price moves implied by candlestick patterns improves your odds of identifying favorable trade points.
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