Indicator of a point Pivot

Pivot Point is a possible turning point at which a change in market sentiment is expected. In other words, it 's the axis around which the market spins. This article will analyze the movement of the market through Pivot Point. The analysis is based on the calculation of certain levels of support/resistance, within the boundaries of which the forecast of possible changes in price movement is made.

 

 

 

The market should be analyzed using Pivot levels only for intra-day trading, since the calculation of the Pivot point, on the basis of which support/resistance levels are formed, is made according to the price readings of the previous day.

 

 

 

How do I calculate the Pivot points?

 

 

In order to calculate Pivot points, you need to take readings of the minimum and maximum price and the closing price of the previous day:

 

 

 

PP = (High Price Low Price Close Price)/3

 

 

 

PP (Pivot Point) - Pichka Pivot;

Nigh Price is the maximal price of the day;

Low Price - minimum price of the day;

Close Price - the price of opening the day.

 

 

Then calculate the support and resistance levels:

 

 

 

The 1st point of support (DS1) is 2 values of the Brevot point minus the maximum price:

DS1 = (2 * PP) - High;

 

 

 

The 1st control point (DR1) is the 2 values of the Pivot point minus the price minimum:

DR1 = (2 * PP) - Low;

 

 

 

The 2nd support area (DS2) is the value of the Brevot minus the difference between the maximum and minimum price:

DS2 = PP - (High - Low);

 

 

 

The 2nd DR2 is the value of the Pivot plus the difference between the maximum and minimum price:

DR2 = PP   (High - Low);

 

 

 

3rd Price Support (DS3) is the value of the price minimum minus the difference between the price maximum and the Pivot point:

DS3 = Low – 2*(High – PP);

 

 

 

3rd value of co-promotion (DR3) - value of price maximum plus difference between Pivot point and price minimum:

DR3 =  High   2*(PP – Low);

 

 

 

There are Forex indicators that build more levels of support/resistance, but they are not always effective. The further away from the point of Pivot is the point, the less significant it has for analyzing the dynamics of the market.

 

How do I talk about Pivot and Uronns?

 

 

If the price is above the Pivot box, it is possible to increase the prices to the co-promotion box.

If the price falls under the Brevot box, it is possible to put the boxes to the support box.

 

 

Directly, the Pivot line is the level of support/resistance.

 

 

Signals for entry into the market

 

 

• The price crossed the level of Pivot from top to bottom and fixed with them or the price reached the level of Pivot from bottom to top and pushed away from it; Take-Profit put in front of the box support, Stop-Loss - behind the level of Pivots;

 

• The price broke through the 1st support area and fixed it, the task - the 2nd support area;

 

• The price reached the resistance box and pushed away from it, the task - the Pivot box/1st support box/2nd support box.

 

 

Signals for entry into the market for purchase

 

• The price crossed the Pivot level at the bottom up and fixed above it or the price approached the Pivot level from the top down and pushed away from it; Take-Profit put in front of the resistance box, Stop-Loss - behind the level of Pivots;

 

• The price of the 1st resistance box and fixed above it, the task - the 2nd resistance box;

 

• The price came to the box of support and turned away from it, the target - box of Pivot/1st box of resistance/2nd box of co-resistance.

 

The power and duration of the tendency to grow/decrease can be determined by the breakdown force. False signals often appear on the market when the price unfolds, returns to the previous level and resumes lateral movement. This is the case because of the release of important economic news or after a major deal, which is an impulse for the currency market.

 

In a situation where the market is in the flat phase, Forex price movement will be formed from the 1st level of support to the 1st level of resistance and vice versa.

 

Separately, trading on the Pivot Points level indicator will not give the expected profit, that is, it should be combined with different technical indicators. Analysis such as "The Skimming Medium" and "Urowni Fibonacci." The Pivot points, however, will act as evidence.

 

 

 

Example of using moving averages (short - red and long - green) and Pivot points

 

Advantages of a point of Pivot:

 

 

High% of correct market forecasts

Simple algorithm of calculation of levels;

Good profit when combining Pivot with other indicators.

 

 

Shortcomings of a point of Pivot:

 

 

The Pivot point is more suitable for binary options;

The closing of the day in different parts of the world takes place at different times, so the significance of the Pivot point will differ for the people of Asia, Europe and America;

Market analysis by Pivot levels is only suitable for intra-day trading.

To add the comment

Comments ()

    Top