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|Learn Forex Trading > Day 9 Class ( Pivot Points ) > How to Calculate Pivot Points|
|How to Calculate Pivot Points|
Pivot points were originally developed by floor traders in the equity and
commodity exchanges. They are calculated based on the high, low and
closing prices of previous trading sessions, and are used by traders to
predict support and resistance levels in the current or upcoming session.
These support and resistance levels can be used by traders to determine
entry and exit points - both for stop losses and profit taking.|
Because the forex currency trading market is so large and liquid, pivot points - which thrive in this type of market - are very useful. The large size of the market, especially in liquid currency pairs such as the EUR/USD, helps prevent market manipulation that would keep the market from adhering to technical principles like support and resistance.
Pivot points are
support and resistance levels derived from the previous period's high,
low, and closing values. There are a variety of pivot values with which to
trade, including monthly, weekly, and daily values. You could even
calculate hourly values. When determining which period to trade with,
you've got to consider your time frame as an individual and your
particular style. I'll use daily pivot points for the purpose of this
article since the focus is day trading.
For instant u can use pivot point calculator for free.
You can download this calculator in this site Download Pivot points Calculator
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