As part of articles series about Technical Analysis ,I'll explain Pivot Points
: I talked in previous articles about
Pivot Points Definition
Forex Traders use Pivot Points as a tool of preference between support and resistance levels and generally pivot points are the area that the prices visit during specific time period and it must visit it or it must be close to it at least
: An Example shows up pivot points on the chart
Pivot Points
? How to Calculate The Pivot Points
Pivot Point = (Highest level of the price + Lowest level of the price+ The Closure point ) / 3
? How to Calculate Support and Resistance Levels Using Pivot Points
: Way of Calculating the first levels of support and resistance
(First Support = 2 x pivot point - ( highest level of the price during time period
(First Resistance = 2 x pivot point - ( highest level of the price during time period
: Way of Calculating the second levels of support and resistance
(Second Support = pivot point - ( highest level of price - lowest level of price
(Second Resistance = pivot point + (highest level of price - lowest level of price
Don't worry you will not doing any calculations because of the indicator of pivot points determines the support and resistance levels on the chart automatically
?How to Trade Using Pivot Points
: There're two ways
The Trading using breakout
Pivot Point (PP) is first place you must look to it instead of focusing on support and resistance levels because you expect that the price will go to it depending on breakout theory (resistance penetration or support penetration ) , when the price reaches to pivot point ,you'll be able to take decision whether the entry of buying or selling or even take profits where the pivot point or stop loss
Generally if the prices higher than pivot point ,we expect higher prices
As for if the prices lower than pivot point ,we expect lower prices
The Trading inside sideways term
When the prices confined at sideways trend , the best for you make buying deals on support levels and make selling deals on resistance levels
You can download pivot point indicator from this link
No comments:
Post a Comment