I personally love trading pivot points.  They are a great leading indicator (you know exactly where they are at the previous day's close).  How I like to think of pivot levels is like a rubberband.  

If you hold a rubberband between two fingers, this resting state would be the PP.  As the market moves to S1 or R1, this rubberband gets pulled back.  The market wants to return to center, it wants to return to the PP, tension is formed, which is why these levels often act as sup/res in the direction back to the PP.

However, sometimes, when the market gets momentum and starts hitting S3, S4, S5, etc. the rubberband flat out breaks and there is no longer any pull back to center. 

Its important to be aware of when this rubberband breaks and to go with the trend!

Lesson