Forex Pivot Point Trading
Pivot Points is one of the most popular method in Forex technical analysis. Pivot point consists support levels, resistance levels and pivot levels. Support, resistance and pivot level calculated by the high, low, close and open price in the previous bar.
Pivot points level is calculated as follows:
Pivot point (PP) = (High + Low + Close) / 3
The first level of resistance and support
First support (S1) = (2 * PP)+ High
First resistance (R1) = (2 * PP)+ Low
The second level of resistance and support
Second support (S2) = PP - (High - Low)
Second resistance (R2) = PP + (High - Low)
But what you can now trade with these pivot points? On the chart you can see that the pivot point acts as a support and resistance, Pivot point, support and resistance works well in trending and side ways market , If Forex market price does not clearly defined direction or in sideways trend, it is not easy to make deccession trading. But we can earn money in this situation . If the price breaking down the pivot level and then touch the support line, the price usually stop and go back to the pivot line. You can use this behavior to make entry position and earn some money.
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Forex is simple follow the trend and you will rich.
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