What Are Forex Pivot Points?

A pivot point is an indicator developed by floor traders in the commodities markets to determine potential turning points. In the forex and other markets, day traders use pivot points to determine likely levels of support and resistance, and thus possible turning points🌼 from bullish to bearish or vice versa.

Understanding Forex Pivot Points

Unlike most technical indicators, pivot points are intended to predict market turning points. They are calculated using simple math and the previous day's high, low, and closing prices. 澳洲幸运5官方开奖结果体彩网:In the forex market, pivot points are calculated using the entire 24-hour trading period, with the price at the end of the U.S. "session" deemed the clo🏅sing price.

The classic pivot point calculations produce the pivot point itself, the strongest of the indicators, as well as three levels of support and three levels of resistance. The location of the 澳洲幸运5ღ官方开奖结果体彩网:price relative to the main pivot poi🔴nt is used to judge whether a 🤡given trading session has a generally bullish or 💜bearish bias.

Pivot points form the foundation of much of the technical analysis used by day traders, al🔯though their effectiveness in indicating turning points may be due to the fact that they are so popular as an indicator that market behav🍒ior at the given levels is something of a self-fulfilling prophecy. Longer-term pivot points can also be calculated using weekly, monthly, quarterly, or annual prices.

Trading With Pivot Points

No matter how accurate pivot points are at 澳洲幸运5官方开奖结果体彩网:predicting turning points, traders still need a viable system to win with them consistently. As with all trading systems, that reꦯquires an entry method, a stop-loss trigger, and a profit💦 target or exit signal.

Some day traders will use pivot points to 澳洲幸运5官方开奖结果体彩网:determine levels of entry, stops, and profit-taking by trying to determine where the majority of other traders may be doing the same. Forex pivot point calc💫ulators are available free of charge across the internet through retail forex brokers and third-party websites.

The most successful trading method🦋s use pivot points with other teᩚᩚᩚᩚᩚᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ𒀱ᩚᩚᩚchnical indicators, such as trend lines, Fibonacci levels, moving averages, previous highs and lows, and previous closing prices.

Basic Pivot Point Formula

The formula for calculating the primary pivot point (using the previous day's prices):

$\begin{aligned} &\text{Forex Pivot Point} = \frac{ \text{High} + \text{Low} + \text{Close } }{ 3 } \\ \end{aligned}$​Forex Pivot Point=3High+Low+Close ​​