Pivot Points help traders organize their trading and give it a certain pattern. It immediately indicates the levels that can potentially be very sensitive (support and resistance). In such places, traders often look for additional indicators that, in combination with Pivot Points, may be more important.
Remember, to treat Pivot Points as an additional indicator that helps in trading.
The most popular and the simplest method.
closing price (C), maximum price (H), minimum price (L), (S) support, (R) resistance
PP (Pivot point) = (H + L + C) / 3
R1 (first resistance) = 2*PP – L
R2 (second resistance) = PP + (H – L)
R3 (third resistance) = PP + (H – L)*2
R4 (fourth resistance) = PP + (H – L)*3
S1 (first support) = 2*PP – H
S2 (second support) = PP – (H – L)
S3 (third support) = PP – (H – L)*2
S4 (fourth support) = PP – (H – L)*3
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