Classes this time around, we've started to speed up our trading
capabilities. As we know, trading has a very broad aspect and continue
to evolve over time. Maybe you have been feeling quite clever in
predicting price movements. Or perhaps has already begun to profit from
Your demo account. Or there's the desperate had tried real account
before school finished? I really want to know the result. If a lot of
the profit before school finished, it might be worthwhile curriculum
forex school we no longer get to Running Pig let alone Hunting Fox. We
shorten the direct and open a real account!
The name of these lessons is the Pivot Points
As for the definition is:
"price movement where the price will
not move too far away from that point in a situation no matter up or
down and keep coming back to these prices."
For an explanation
of the pivot point, to make it more easily understood, Pivot Point is
another way that is often used to determine the level of Support
Resistance in the range 1 & trading days. The advantages of pivot
point than the method of Support of the other Resistance & i.e. each
trader around the world use the same formula for calculating pivot so
that the pivot is the level of market psychology is most often used by
traders to make a decision.
The basic principle of Pivot:
• normally when prices opened above the pivot then psychologically prices will rise (though not always) Vice versa.
• Prices are likely to attempt to penetrate the pivot levels, support & resistance.
• When strong momentum then prices will penetrate the pivot toward the support or resistance but when momentum is weak then the price will turn direction.
• When the price did not touch the price usually tend to pivot away from the pivot.
Well this time the class will discuss other aspects in trade. We will still be studying graphs and then began moving into fundamental analysis. And today we will discuss a session called Pivot Points!
In fact prices do not always follow the principle of the Pivot Point, hence the use of the fixed-pivot system need to be assisted with other indicators.
At the moment the price of moving the pivot point is approaching many traders began to enter the market to take a position, buy or sell, and set a target profit (take profit) as well as the limits of loss (stop loss). In General if the price is above the pivot, then the market is considered bullish (up). Conversely, if the price is below the pivot, the market is said to be bearish (down)
If the price is stuck below the pivot point (PP) and closed at that level, it is a good enough reason to take a position; sell ' with some stop-loss point above PP and profit target around S1.
But if prices continued to move down and penetrates S1 off on closing the transaction you can move ' stop-loss ' some point above S1 and put the next profit target on S2. Usually a lowest level is S2 from the daily currency movements and closing the transaction at this level is a wise step.
The opposite occurs when the price is above the pivot point and closed at that level. You could take a position with a stop-loss below the pivot point and the target profit some point under R1. But if the price goes up with a powerful and penetrating the R1, stop-loss can be raised and placed under the R1 while it shifts to the target profit level R2.
The strength of support and resistance on different pivot level is determined by the number of times a price reaches that level, and then reverses direction.
The more often the price reaches the level it and then reverses direction then the more powerful pivot levels.
If the movement of the price moves up nearing the resistance, you can observe when prices will be turned down. When prices move down you could take a position with a stop-loss selling above the resistance. But sometimes this pretty strong ride movement and resistance can be impregnable so stop-loss you incur. This is the risk in the forex. But if you believe that movement is so powerful, you can take a position to buy when prices break through resistance. In this condition the resistance turns into support so you can install a stop-loss under the new support level (i.e. the previous resistance). In this way the loss you experienced in early transactions covered the advantages that you get on the second transaction.
Similar things you can do if the price moves down approaching support. When price reverses direction and starts moving up you can do transactions with buy stop loss below the line of support.
This material is actually not too interesting to be discussed. But somehow many once asking what it's pivot points. May indeed be useful. So finally learn Forex feels the need to integrate it in our school curricula concerning the request that extends from time to time.
. Pivot Points calculation is to determine the area of support and ressisatance. He does not belong to the indicator, but still arguably as branches of technical analysis because of a mutual decision based on a projection of the past. Consider the following formula:
Pivot point = (H + L + C + O)
/4 R1 = (2 x P) – L
R2 = P + (H – L)
S1 = (2 x P) – H
S2 = P – (H – L)
The above formula is the formula in the calculation of Support Ressistance using pivot points. Is O, H, L, C and P in a row is an Open, High, Low, Close and Pivot on a candlestick chart. R and S is a Ressistance and Support. Unlike the soup and ress using price history, on a Pivot point, we can use the soup and ress coated even until recent times. Let's look at an example calculation:
the following are the data O, H, L, C of the GBPUSD with the period H1
| Open | 1,6349 |
| High | 1,6349 |
| Low | 1,6310 |
| Close | 1,6331 |
Then Pivot point calculations thus becomes:
= P
(O + H + L + C)/4
P = (1.9984 + 1.9991 + 1.9874 + 1.9900)/4
1.9937
= P Nah thus soup and Res can be determined as follows:
Soup 1 = (2 x P) – H
Soup 1 = (2 x 1,937 – 1.9991
Soup 1 = 1.9884
Soup And 2 Soup
are: 2 = P – (H – L) Soup
2 = 1.9937 – (1.9991 – 1.9874) Soup
2 =
Ress 1.9820 1 :
Res 1 = (2 x P) – L
Res 1 = (2 x 1.9937) – 1.9874
Res 1 = 2.0001
Ress Ress
2:2 = P + (H – L)
Ress 1.9937 + 2 = (1.9991 – 1.9874) Ress
2 = 2.0064
when the price approaches a Support point, chances are the price will turn back up or if the trend goes down too strong, then prices will trend down to pass through and be the stronger
If the price is approaching the point of ressistance then prices will come back down away from the point of resistance, but if the trend of rising far too strong (usually because the fundamental issue) then the price will be translucent dots ressistance to then rise further.
The next question is how accurate the use ressistance and support point by using a pivot point? Hmm ... a tough question. The key to a pivot point inaccuracies are taking point High, Low and Close the right in accordance with the history that happened. Many of the traders are modifying their Pivot in such a way so that it no longer uses the H, L, C, and O at the candle before but it could be just some candle previously summarized into one. Other traders modifying formulas pivot so that it corresponds to their trading way.
So far the Pivot used is quite widespread in daily trading. The fit is also quite passable. The difficulties that occur in a life is on the pivot frequently need to enter this formula and it did. For Your mempremudah, use Excel in defining the point P, soup and Res so you simply enter the number H, L, C and O only.
One thing to keep in mind, Pivot is pretty potent when the price is being affected not news or issues a strong fundamental. In the circumstances the news emerged and price volatility became a routine but no more likely to move because of the irregular supply demmand, Pivot became less effective so it would be better to switch to the calculations of the soup and Res psychologically not technically as the Pivot Point.
Pivot Points and Real Trading conditions
Pivot point is often successful because there are a lot of traders who also believe in this theory and set the pivot point at roughly the same level. So when the price moves are approaching this level there are many traders are taking a similar reaction so the price tends to be reversible.
However there are many cases where the pivot point is not successful at all. Usually this occurs when there are data or fundamental news that makes the price tends to move with a strong trend and a lot of traders ignoring all forms of resistance and support.
Therefore any condition there is no better strategy than this: follow the trend is happening in the market. So in normal market conditions and price moves in the limitation of support and resistance, perform transactions by following that pattern. Likewise, if there is a strong trend and price moves to one direction, forget about the question of support and resistance, just follow the trend.
