Translated from Russian by Google Translate
2 Сентябрь 2009

Indicator reversal points forex Pivot

Tell me how you define support and resistance levels? Modalities are many, and they are all on their own effective. In addition to the simple way «to the eye», there are various indicators for Forex, with which you can greatly simplify the task of determining levels of support or resistance. One of these indicators is an indicator of reversal points Forex - Pivot.


Pivot Levels let their roots in the distant 1934. Since this indicator is firmly entrenched in the list of commonly used technical tools. Indicator reversal points Forex Pivot simple and convenient. It is used by leading banks in many countries, traders and investors for many decades.

What can make this indicator Forex?
Analysis of the currency market Forex with Pivot levels is a mathematical method for calculating the indicative price range of motion. And based on the level of Pivot are calculated data for the construction of support and resistance levels for a specific time interval.

Through the application of mathematical calculations can determine:

• Three levels of resistance, which prevent price rise
• Three levels of support that prevent price drop
• The point of rotation. It represents the level sought by the price

These levels can be built:

• Daily Pivot-levels. These levels are based on data from the previous day.
• Weekly Pivot-levels. These levels are based on the weekly chart. Of course, using data for the past week.
• Monthly Pivot-levels. There used to construct price extremes (maxima and minima) and the closing price for the month that we have studied.

The peculiarity of these levels is that regardless of the timing indicator trade forex Pivot points pivot should be taken into consideration, whether monthly, weekly or daily level. If you prefer scalping, in this case, you need to focus particularly on the daily level.

It is divided in turn into several components:

• Pivot - a day the central point. This point represents the concentration of the most frequent price movements in a certain range. Either the place where the price is very often unfolded
• S1 - this is the first level of support. S2 and S3 - the second and third, respectively
• R1 - is the first level of resistance. R2 and R3 - the second and third, respectively

In that case, if we want to calculate the daily level, then we will need a minimum, maximum, and the closing price of the day. Accordingly, for weekly and monthly level, we need the appropriate values.

With regard to the use of the indicator Pivot.

This indicator is most effective in the futures markets and forex markets. As a rule, if the trend the price goes way up from the first level of support (resistance) to the third level of support (resistance). As is recommended to use a second level of support (resistance). In practice, quite often seen as the price «walking» between support and resistance levels, and the level Pivot acts as an axis of rotation rates.

By the way, do not forget one basic truth. All methods are good when they are used in conjunction. So try to find additional methods of determining support and resistance levels, and use them in conjunction with the indicator turning points Forex. As an additional indicator, you can use Fibonacci levels or moving averages.

Additional filters that you use for the analysis is somewhat complicated system of analysis, but on the other hand you get a quality signal for opening or closing position. Also do not forget that the weekly and monthly levels are more reliable than the daytime.

Another problem that occurs all too often - this definition is the entry point into the market. It is for these purposes, we could not be better suited as indicators Forex Pivot.

Consider the signals that gives light reversal points Forex Pivot.

Indicator forex pivot points

1. If the price breaks through the 1-st level of resistance and continued upward movement, it says that we have a strong bull market

2. If the price breaks through the 1-st level support and continues to move downwards, it indicates the strength of bears

3. If the price varies in the range between support and resistance levels and turning points, in most cases, this would indicate that the market will wait and see attitude. Such behavior is typical to the expectation of the important news

4. After the news, if the price breaks through the 1 st line support or 1-th line of resistance and continued to move to 2-nd line support (resistance), it tells us about the strong influence of news

5. Typically, the price rarely reaches the last, 3-levels of support (resistance). Such behavior is typical for currency pairs with high volatility, or in periods of great burst. Therefore, when it reaches the line is expected to hang up the price and its movement in the opposite direction.

Disadvantages indicator Pivot:

1. During the day the price can regularly cross the reversal point. Such behavior will not be able to give us a clear vision of the situation

2. Level turn Pivot must have dynamic and able to adapt to different conditions depending on the current session of the Forex market

3. For each time-frame Pivot should be different. For example, the indicator on the weekly chart is significantly different from 4 hours. You should independently determine what your master schedule and build on this in the calculation of the working Pivot

As for me, I use these levels for quite a long time. They are very well established, so in the near future I am unlikely to remove them from their charts. Of course, if you first hear about the indicator reversal points Forex Pivot, then you it will be interesting. But I must tell you, this indicator works very well. So do not be lazy to test it and perhaps this item will be your favorite tool of market analysis.