Pivot Point Analysis is a famous technique that is used as a price forecasting method for day Traders and professional traders as well.It is very popular among professionals.You should have a better understanding of this method after reading and studying this Text and the benefits to you may help improve your timing of entry and exit points of the market.
There are numerous advisory services, brokerage firms and independent traders that use one form of it or another.support/Resistance, price range forecasting pin pointing tops and bottoms and target trading are some of the terms that are used to refer to it as well.
First here is the mathematical formula where P=Pivot Point; C=Close;H=High:and L=Low.
The Pivot point number is the high,low,close added up and then divided by three.P=(H+L+C)/3=pivot point.Now for the first resistance level take the pivot point number times two and then subtract the low.(Px2)-L=Resistance 1.For the second resistance,take the pivot point number add the high and then subtract the low.P+H-L+Resistance 2.
For the first support take the pivot point number times two and then subtract the high.(Px2)-H=support 1
For the second support,take the pivot point number sustract the high and then and the low.P-H+L=Support 2.
Copyright ©2002 by John L. Person III, CTA Written by John L.Person