How to Utilize Pivot Points and What is Forecasted After the DNB Crisis?

[Mark Jansen 10]

How to utilize Pivot points and what is forecasted after the DNB crisis?

[tradelab03 10]

How to Calculate Pivot Points

There are several different methods for calculating pivot points, the most common of which is the five-point system. This system uses the previous day's high, low and close, along with two support levels and two resistance levels (totaling five price points) to derive a pivot point. The equations are as follows:

 

R2 = P + (H - L) = P + (R1 - S1)

R1 = (P x 2) - L

P = (H + L + C) / 3

S1 = (P x 2) - H

S2 = P - (H - L) = P - (R1 - S1)

 

Here, "S" represents the support levels, "R" the resistance levels and "P" the pivot point. High, low and close are represented by the "H," "L" and "C," respectively. Note that the high, low and close in 24-hour markets (such as forex) are often calculated using New York closing time (4 p.m. EST) on a 24-hour cycle. Limited markets (such as the NYSE) simply use the high, low and close from the day's standard trading hours.

[Mark Jansen 10]

Thank you for the elaborate explaination of the topic, it is much more clearer now. I also found this interesting article over the weekend. Since it displaysthe points for this month: February Monthly Forex Pivot Points - AtoZ ForexAtoZ Forex I thought you also wanted to have a look at it.