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Technical Analysis: Forex (FX) Pivot Points
Pivot points are high-probability price levels derived and assumed from technical analysis. Pivot points are widely used by professional forex traders.
How to use pivot points in online forex trading?
One way is to plot forex price charts with pivot points. Another way to trade forex with pivot points is to use the free pivot points calculators provided here to get the hourly, daily or weekly forex point pivots before the start of a trading session. The best way to trade forex with pivot points is to use them as possible target or/and support / resistance levels, with the help of other technical indicators such as trend indicators for confirmation.
Floor (Classical) Pivot Points:
The floor (classical) pivot points are the most popular type of pivot points used in forex trading. With this method the pivot points of the current period are derived from the high (H), low (L) and close (C) prices of the previous period. The rule to calculate the floor (classical) pivot points is as follows:
Pivot (P) = (H + L + C) / 3
Resistance 1 (P1) = (2 * P) - L
Resistance 2 (R2) = P + H - L
Resistance 3 (R3) = H + 2 * (P - L)
Support 1 (S1) = (2 * P) - H
Support 2 (S2) = P - H + L
Support 3 (S3) = L - 2 * (H - P)
(H: high; L: low; C: close; P: pivot)
Free On-line Floor (Classical) Pivot Points Calculator
Tom DeMark’s Pivot Points:
Tom DeMark’s pivot points are the predicted new high and new low of the current trading period. With tom DeMark's method, current period's trading range is derived from the high (H), low (L) and close (C) prices of the previous period together with the opening price of the current period. Here are rules to calculate Tom DeMark's pivot points:
If Close (previous) is less than Open (current): X = H + 2 * L + C;
If Close (previous) is greater than Open (current): X = 2 * H + L + C;
If Close (previous) is equal to Open (current): X = H + L + 2 * C;
New High = X / 2 - L;
New Low = X / 2 - H
(H: high; L: low; C: close; P: pivot)
Free On-line Tom DeMark’s Pivot Points Calculator
Woodie's Pivot Points:
Woodie's pivot points are similar to the floor (classic) pivot points, but more weight is given to the close price. Woodie's also uses the high (H), low (L) and close (C) prices of the previous period to generatepivot points of the current period. The rules to calculate Woodie's points are as follows:
Pivot (P) = (H + L + 2 * C) / 4
Resistance 1 (P1) = (2 * P) - L
Resistance 2 (R2) = P + H - L
Support 1 (S1) = (2 * P) - H
Support 2 (S2) = P - H + L
(H: high; L: low; C: close; P: pivot)
Free On-line Woodie's Pivot Points Calculator
Camarilla Pivot Points:
Camarilla pivot points for the current period are derived from the high (H), low (L) and close (C) prices of the previous period. The following rules are normally used to calculate Camarilla pivot points:
Pivot (P) = (H + L + C) / 3
Resistance 1 (P1) = (H - L) * 1.1 /12 + C
Resistance 2 (R2) = (H - L) * 1.1 / 6 + C
Resistance 3 (R3) = (H - L) * 1.1 / 4 + C
Resistance (R4) = (H - L) * 1.1 / 2 + C
Support 1 (S1) = C - (H - L) * 1.1 / 12
Support 2 (S2) = C - (H - L) * 1.1 /6
Support 3 (S3) = C - (H - L) * 1.1 / 4
Support 4 (S4) = C - (H - L) * 1.1 / 2
(H: high; L: low; C: close; P: pivot)
Free On-line Camarilla Pivot Points Calculator
Fibonacci Pivot Points:
Fibonacci pivot points are a combination of the floor (classics ) pivot and the fibonacci ratios. First the pivot of the current period is calculated by dividing the sum of the high (H), low (L) and close (C) prices of the previous period by 3. Then different fibonacci ratios are added to this pivot to calculate the resistance and support levels:
Pivot (P) = (H + L + C) / 3
Resistance 1 (P1) = P + (H + L) * 0.382
Resistance 2 (R2) = P + (H + L) * 0.618
Resistance 3 (R3) = P + (H + L) * 1.0
Support 1 (S1) = P + (H - L) * 0.382
Support 2 (S2) = P + (H - L) * 0.618
Support 3 (S3) = P + (H - L) * 1.0
(H: high; L: low; C: close; P: pivot)
Free On-line Fibonacci Pivot Points Calculator
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