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Education

EDUCATION: WHAT IS PIVOT POINT? HOW TO BREAKDOWN IT?

FX:EURUSD   Euro / U.S. Dollar
Hi fellows,

The pivot point is one of the necessary subjects to learn before starting to do trades.

What is the pivot point?

The pivot point is the point to calculate the overall movement in the different time frames. The pivot point itself is a sum of High, low and closing prices from the previous day divided by three.
PIVOT POINT=Previous high+previous low+previous close/3.
In the modern trading way, we have specified indicators to find it out.
No need to calculate Just a click is enough.

BREAKING DOWN PIVOT POINT

The pivot point is often used in conjunction with calculating support and resistance levels, similar to the trend line analysis. The first support and resistance levels are calculated by using the width of the trading range between pivot point either high or low prices of the previous day.

RE-ACTIONARY POINT

The pivot point is considered as a reactionary price level. The Prices tend to pause or deflect when the pivot point is initially tested. Combining pivot points with other trading strategy is a common practice with traders.

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