Forex Day Trading with Pivot Points!
For one of the best courses on forex day trading with pivot points, you have to check out Peter Bain’s Forex Mentor course and his pivot point trading system.
Peter Bain is a forex trader and educator who teaches his system to the banks, financial institutions and professional forex traders.
He has made his course available to you through his company’s website here:
Click here to read more on Peter Bain’s Pivot Point Forex Day Trading System
Learning How To Calculate Pivot Points
So, you’ve heard about pivot points and you think that’s the secret to forex day-trading success, am I right?
Well, you’re half right. Pivot points are used by the commercials, i.e. the fund managers, bank traders to find levels of support and resistance for the current day’s range. These price levels also help to define the possible trading range for the following day, although they can still be exceeded on certain days.
Calculating Pivot Points
There are several methods of calculating pivot points, and the simplest method derives the following price levels with can serve as potential support and resistance for the current trading day.
This method helps you calculate the following price levels:
R3 - Resistance Level 3
R2 - Resistance Level 2
R1 - Resistance Level 1
PP - Pivot Point
S1 - Support Level 1
S2 - Support Level 2
S3 - Support Level 3
Step One for Calculating Pivot Points
In order to derive the different levels, you start with calculating the Pivot Point using the High (H), Low (L) and Close (C) of the previous day. The formula is as follows:
Pivot Point = (H + L + C) / 3
For example, using the EURUSD:
The High of the previous day = 1.4098
The Low of the previous day = 1.3970
The Close of the previous day = 1.4069
The Pivot Point would then be:
PP = (1.4098 + 1.3970 + 1.4069) / 3
PP = 1.4046
From your pivot point, you would then be able to derive the Support and Resistance Levels by…
Step Two for Calculating Pivot Points
Substitute the numbers into the following formulae to get your pivot point, support and resistance levels:
R3 = (pivot point - S2) + R2
R2 = (pivot point - S1) + R1
R1 = (2 x pivot point) - Low (of previous period)
PP = (H + L + C) / 3
S1 = (2 x pivot point) - High (of previous period)
S2 = pivot point - (R1 - S1)
S3 = pivot point - (R2 - S2)
Giving you the following price levels of support and resistance:
R3 = 1.4249
R2 = 1.4174
R1 = 1.4121
PP = 1.4046
S1 = 1.3393
S2 = 1.3918
S3 = 1.3865
How To Trade With Pivot Points
The generally accepted use of pivot points is that when price is above the pivot point, the market is bullish. And when price is below, the market is bearish.
So when price is trading above the pivot point, you will want to take bullish trades and place your stops on the opposite side of the support levels. And when price is trading below the pivot point, you will want to take bearish trades and place your stops on the other side of resistance levels.
Top Pivot Point Forex Day Trading Courses
For one of the best courses on forex day trading with pivot points, you have to check out Peter Bain’s Forex Mentor course and his pivot point trading system. Peter Bain is a forex trader and educator who teaches his system to the banks, financial institutions and professional forex traders.
He has made his course available to you through his company’s website here:
Click here to read more on Peter Bain’s Pivot Point Forex Day Trading System