Pivot Point Calculator - Key Levels for Technical Analysis

In order to measure the accuracy of pivot points in the span of x number of days, here's what we can do:

Subtract the actual Low on that day with the support level based on pivot points. You'll get these formulas: Low – S1, Low – S2, and Low – S3.

Subtract the actual High on that day with the resistance level based on the pivot points. You'll get these formulas: High – R1, High – R2, and High – R3.

Find the average value of each result.

Continue Reading at Your Definitive Guide to Pivot Points in Forex Trading

Here's an example of how to combine RSI divergence with pivot point levels.

From the chart above, we can see that there was a bearish divergence on the RSI. This suggests that the price might move down from there. You can open a short position after the price breaks through R1 (which was still a support level at the time). Place a stop loss on the previous High and take profit based on the pivot point.

Continue Reading at Your Definitive Guide to Pivot Points in Forex Trading

Pivot points can be calculated daily based on the High and Low of the previous day. You can also count it weekly based on the High and Low of the previous week. In some cases, pivot points can even be calculated monthly. Day traders typically use daily pivot points, whereas swing traders typically make use of daily and weekly pivot points.

In short, you can calculate the pivot point by using the following formula:

Pivot Point = High + Low + Close / 3

You can then draw the accompanying support and resistance levels with the formula below:

• Resistance 1 (R1) = (2 x Pivot Point) - Low
• Support 1 (S1) = (2 x Pivot Point) - High
• Resistance 2 (R2) = Pivot Point + (High - Low)
• Support 2 (S2) = Pivot Point - (High - Low)
• Resistance 3 (R3) = High + 2 x (Pivot Point - Low)
• Support 3 (S3) = Low - 2 x (High - Pivot Point)

Continue Reading at Your Definitive Guide to Pivot Points in Forex Trading

An example of Moving Average fakeouts consists of three Simple Moving Averages (SMAs), they are 14-period, 30-period, and 50-period SMAs. A buy signal appears when the pivot points of all three SMAs are sloping upward, and prices have pulled back to the 14-period SMA without dropping below the 30-period SMA. Traders then may go long when prices move above the lowest previous high beyond the 14-period SMA, as shown below.

In the other direction, a sell signal appears when the pivot points of all three SMAs are sloping downward, and prices have gone up to the 14-period SMA without going over the 30-period SMA. Traders then may go short when prices move below the highest previous low under the 14-period SMA.

Continue Reading at Are Moving Average Fakeouts Tradable?