Novices who have just started to learn the instruments of the Forex market which are used for analyzing data concerning trading positions very frequently ask the questions about forex trading advice Pivot Point calculators which are widely used by the followers of nay effective Forex Pivot Point trading system. We have decided to clarify this issue in details and tell you the basics of calculations and functions which are applied within the limits of effective Forex Pivot Point trading system.
The definition and the major principles of the effective Forex Pivot Point trading system:
In order to calculate Pivot Points on the previous days’ movement you need to take into account the trades which hit the market in its support or resistance position of the so called pivot point which is provided by the OB/OS indicator. These support/resistance lines of the market are placed as the first thing in the morning and that is why it is so important to learn to apply Pivot Point calculator and the whole effective Forex Pivot Point trading system in practice. After setting them all you have to do is to wait for the Forex market to be hit the set entry points.
In spite of some negative review the effective Forex Pivot Point trading system is the most widespread way used by Forex traders to predict the entry point for providing trades. This method was used long before the appearance of personal computers by the financial market’s traders to predict the hidden support/resistance levels.
That is why no wonder Forex technical analysis’ followers use the effective Forex Pivot Point trading system nowadays as well. The main principle and aim of using of Pivot Points is in the following:
When the Forex market goes up, done or sideways it looks a sort of an elastic band that has been stretched and that will rebound to the so called equilibrium point where the market is balancing and then will stretch in the opposite way in order to rebound and then hit another point of balance. Pivot Points can assist in determining how far the elastic stretches before being rebounded.
Despite the fact there are plenty of time frames within which Pivot Points can be calculated it will be better to concentrate in the beginning on the daily time frame (24 hours frame) where the effective Forex Pivot Point trading system works considering the results of such indicators as Open. High, Low and Close figures are used. In order to calculate the Pivot Points you can use the automatic tools - calculators – which can be found anywhere at the specialized resources online. You just need to point out the time frame and the calculator will estimate the hidden support/resistance. However always keep in mind the longer periods of time you are applying the longer you are to stay at the Forex market or wait for the fitting entry point if you have not entered the market yet.
Besides the current situation the effective Forex Pivot Point trading system can be used to predict the highs and lows of the upcoming day. PP allows finding out from 4 to 8 support/resistance levels. Use PP only at the trending market.
Forex entry and exit points that can be given by Pivot Points allow calculating entry and exiting points. If you combine the Pivot Points with your technical indicator forex articles you can build your individual and effective Forex trading system.
Effective Forex Pivot Point Trading System: The Guide for Be