Mikemachuma31
New Member
A pivot point is a is a technical indicator used by forex traders as a price level gauge for potential future market movements. The pivot point indicator is used to determine trend bias as well as levels of support and resistance, which in turn can be used as profit targets, stop losses, entries and exits.
HOW TO CALCULATE PIVOT POINTS
The calculation for the most basic flavor of pivot points, known as ‘floor-trader pivots,’ along with their support and resistance levels:
Pivot point formula
Pivot point (PP) = (High + Low + Close) / 3
First resistance (R1) = (2 x PP) – Low
First support (S1) = (2 x PP) – High
Second resistance (R2) = PP + (High – Low)
Second support (S2) = PP – (High – Low)
Third resistance (R3) = High + 2 (PP – Low)
Third support (S3) = Low – 2 (High – PP)
There are other ways to calculate the pivot point, which is available on most trading platforms and can be extended through different time frames. The support and resistance levels will be calculated as above. Below is an example of what is offered on the IG trading platform for daily pivots. The same calculation can be made for weekly or monthly pivots too:
HOW TO CALCULATE PIVOT POINTS
The calculation for the most basic flavor of pivot points, known as ‘floor-trader pivots,’ along with their support and resistance levels:
Pivot point formula
Pivot point (PP) = (High + Low + Close) / 3
First resistance (R1) = (2 x PP) – Low
First support (S1) = (2 x PP) – High
Second resistance (R2) = PP + (High – Low)
Second support (S2) = PP – (High – Low)
Third resistance (R3) = High + 2 (PP – Low)
Third support (S3) = Low – 2 (High – PP)
There are other ways to calculate the pivot point, which is available on most trading platforms and can be extended through different time frames. The support and resistance levels will be calculated as above. Below is an example of what is offered on the IG trading platform for daily pivots. The same calculation can be made for weekly or monthly pivots too: