How to Apply Pivot Points Effectively When Trading Forex

How to Apply Pivot Points

Effectively when Trading Forex

WHAT ARE FOREX PIVOT POINTS?

• Forex pivot points are calculated horizontal price levels on the chart. These levels show potential areas where the price can reverse, especially during the first touch of these levels.

HOW TO CALCULATE PIVOT POINT

• Pivot Point (PP) = (Daily High

+ Daily Low + Close) / 3

PIVOT RESISTANCE• R1 = (2 x Pivot Point) – Daily Low

• R2 = Pivot Point + (Daily High –Daily Low)

• R3 = Daily High + 2 x (Pivot Point – Daily Low)

PIVOT SUPPORT• S1 = (2 x Pivot Point) – Daily High

• S2 = Pivot Point – (Daily High –Daily Low)

• S3 = Daily Low – 2 x (Daily High –Pivot Point)

TRADING PIVOT POINTS

• Be bearish when the price is below the main pivot point.

• Be bullish when the price is above the main pivot point.

• Go long if the price bounces from S1, S2, or S3.

• Go short if the price bounces from R1, R2, or R3.

The first touch of these levels offers the highest probability of

success.cc: jaredjhansen - https://www.flickr.com/photos/47602407@N02

Pivot Point Indicator Plotted on Chart

Trading Pivot Points Using Price Action

Check Out the “IN DEPTH”

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