Pivot Points

Pivot points can be an effective method for defining reversal, resistance and support levels in the Forex market. Many traders use pivot points to predict daily market price movements.

The Pivot point strategy includes seven technical levels: three resistance levels, three support levels and the actual pivot point level. The three most important pivot points are Resistance1, Support1 and the actual pivot point. This is what the strategy postulates: if the market is trading above the pivot point, then the bias for the day is bullish. If the market opens below the pivot point then the bias for the day is bearish. By the time the market reaches Resistance2, Resistance3 or Support2, Support3, the market will already be overbought or oversold and these levels should be used for exits rather than entries.

There are four methods for computing pivot point levels: Pivot, Woddie, Fibonacci and Camarilla. The Pivot method is the most commonly used. Woodie, Fibonacci and Camarilla are alternative methods. The service also includes a custom pivot calculator which computes all levels according to the input data.

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