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Learning to Read the Right Forex Signals

October 27, 2011 By Raj 2 Comments

This article was written by John from Forex Trading Finder.

Forex trading, on the outface, may seem quite simple, but it is much more strategical than you would initially believe. If you want to make a profit in this highly liquid trading market, you can’t go walking in blindly; you must learn to read the forex signals in order to make the best decisions for your portfolio. Furthermore, you must be aware of the high potential for losses, as forex trading is one of the most volatile investment markets out there today. This can mean both huge profits or huge losses, so a risk assessment ought to be necessary before getting started.

There are many forex trading software companies that provide top of the line forex trading signal readers for traders to help make improve their chances of big wins in the markets. This software will allow you as the forex trader to be able to more accurately predict the direction of many different currency markets, as well as determine which currencies are best for your portfolio given your financial circumstances. Having this knowledge in your investing arsenal is immensely beneficial, as it will help you to minimize losses while improving your chances of large profits in forex trading.

Aside from software, learning to read the indicators yourself or receiving updates on your mobile phone or email from trusted forex trading sources is also quite useful to have. If you don’t know when to buy or when to sell, you could be potentially digging yourself into a hole of debt or missing out on chances to turn around a big profit on your currency pairs. Learning to read and interpret graphs may not seem too exciting, but when it means more money for you then possibly you’ll be willing to change your mind. Of course, software available takes all the guesswork and frustration out for you, but learning to read the indicators yourself is still a useful skill to have when involved in forex trading.

Furthermore, it is important to pay attention to the news, as this could be a major indicator of where the value of currencies are headed. Especially while in the midst of a global financial crisis, seeing what each country is doing to shore up their economies and protect the value of their currency is crucial to predicting the direction of forex trading markets. Watch interest rates. What are the central banks up to? How do investors in those countries feel about their own currency?

As with any type of investing, you can’t just plug your money somewhere and hope for the best. You shouldn’t even be just dumping your money into an investment recommended by an “expert” because even these guys can be wrong. Learning to read forex trading signals on your own is an important skill to have if you’re looking for long term success in this always-changing market.

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The top 5 Forex Trading Platforms – Forex – Forex Trading

October 25, 2011 By clintstarr Leave a Comment

The top 5 Forex trading platforms

Individuals, corporations and financial institutions speculate on international currency values before trading currencies on the Forex market – the world’s foreign currency exchange – using Forex trading platforms.

Read on for more on currency trading and the top 5 Forex trading platforms.

Why trade currency on Forex?

Traders speculate on fluctuations in international currency values to profit by exchanging currencies on the Forex market.
While currency values vary slightly throughout any given day, political or economic instability can cause currencies to rise or fall in value, allowing traders to benefit from exchanging a particular currency at times when it increases in value or buying currency when its value has depreciated.

Forex trading platforms

Forex trading platforms allow traders to trade currency on the Forex market and manage holdings using professional charting, research and order management tools.

Why use Forex trading platforms?

Most Forex trading platform agreements come with access to research and reports on the currency market, allowing traders to make informed choices when speculating on currency values – reducing the risk of making a loss and increasing the likelihood of making a profit.

Some Forex trading platforms can be accessed remotely using mobile devices, meaning currency can be traded on-the-go, allowing traders to profit from sudden fluctuations in currency value.

The top 5 Forex trading plaftorms by volume:

  1. FXCM
  2. Gain Capital
  3. GFT
  4. Oanda
  5. Saxo Bank

The top 5 Forex trading platforms: explained

FXCM

FXCM provides trading platforms that are suitable for new traders and advanced traders. FXCM’s basic Forex trading platforms offer streaming quotes, order types and reporting tools, while FXCM’s advanced tools offer hedging, trading from charts, one-click trading and more. FXCM offers traders lower spreads and no trading restrictions.

Gain Capital

Gain Capital was named the FT Investors Chronicle Best Forex Platform 2010, the Best US Forex Broker 2010 and the MEOT Best Retail Services Provider 2010.

Gain Capital offers Forex trading platforms for desktop use, mobile use and website trading. Gain’s GTX trading platform is commonly used by individual investors, hedge funds and financial institutions.

GFT

GFT offers three award-winning Forex trading platforms – DealBook 360, DealBook Web and DealBook Mobile – to facilitate Forex trading from desktops, remote-access devices and mobile devices. Traders who use sign up to a GFT Forex trading account can access GFT’s Forex trading platforms as well as charted data and other free tools.

Oanda

Founded by a computer scientist and economist, Oanda’s Forex trading platforms are geared toward remote access and mobile trading. Oanda offers mobile Forex trading platforms via downloadable apps for Android devices as well as BlackBerrys, iPads and iPhones. Oanda’s full-featured desktop trading platform can be installed using any web browser without installing specialist software.

Saxo Bank

Saxo Bank was named Best Forex Broker in Northern Europe and Best White Label Solution Provider at the World Finance Foreign Exchange Awards 2011. Saxo Bank’s Forex trading platforms operate across Forex, FX Options, Spot Gold, Spot Silver, CFDs, Index Tracking CFDs, Stocks, ETFs and ETCs. Saxo Bank offers three Forex trading platforms – Saxo Trader, SaxoWeb Trader and SaxoMobile Trader – for use across desktops and mobile devices.

Metatrader and Forex trading platforms:

While Metatrader does not broker a platform for use, it does produce bid management software often licensed to brokers who provide Forex trading platforms to traders.

Author Bio: Clint is a part of the digital blogging team at cashzilla.co.uk who work with big finance brands and Forex trading sites. For more information about me, or to keep up to date with the latest in finance news, check out my posts at cashzilla.co.uk or visit my Twitter account, @cashzilla.

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SWAP IN FOREX TRADING : REQUIRED FOR ALL REAL INVESTORS

October 22, 2011 By Raj 2 Comments

Author’s Bio: This is a guest post contributed by V. Allison from getforex.

What exactly is Forex swap?

Swap is a forex trading (a transaction which consists the decision to make the sale of a stated amount of currency and the acceptance of another currency of a different country) term which means a real-time buying and selling of the same amount of a particular currency for two different rates for the selling and purchasing of another currency.

Forex swap is a type of borrowing mechanism in which an investor can buy or sell a base currency at present and can sell or buy in future. It takes place when a trader and a broker trades one currency for another at a decided rate and then convert those currencies back at a particular date in the future, at the previously decided exchange rate. It is also referred as the FX swap.

It involves:

  1. A spot transaction: It can be described as a two-day delivery transaction that can be said as a direct exchange between two currencies within a short span of time that involves cash transaction but it does not include interest. It also does not include trades between US or Canadian Dollar, Turkish Lira, Euro and Russian Ruble, which settle the next business day.
  2. A forward transaction: It can be described as a one way dealing with the foreign exchange risk. This transaction occurs at any future date at a pre-decided exchange rate in spite�of the present market rate. The duration for this transaction is decided by the broker and the trader that may be for few days, months or years.

Relation between spot and forward transaction is:

 

relation between spot and forward transaction

Where:

  • F – forward rate
  • S – spot rate
  • r1 – term currency’s simple interest rate
  • r2 – base currency’s simple interest rate
  • T – tenor ( it is calculated as per the day count convention)

Difference between Forward and Spot = Forward points or Spot points.

Difference Between Forward and Spot

Where:

      r1 and r2 are small.

When the interest rate difference get larger or smaller, the absolute value of swap points increases.

Pricing of FX Swaps:

The price or cost of an FX swap can be determined by the difference of interest rate between the two swapped currencies. It can be measured by the swap points or the equivalent foreign exchange.

Uses of Forex swap:

  1. It is used to hedge against exchange or currency risk.
  2. It is used to speculate on a change in interest rate differentials.
  3. It is used to borrow money for a short span of time.
  4. It is used to extend or rollover an existing forward contract.
  5. It is used to take a view on future interest rate
  6. It provides a way of using the foreign exchange markets as a funding instrument and an alternative to lending and borrowing in the Eurodollar.

Real investors hedge or secure their trades or investment in the Forex market against substantial losses. They can achieve hedging or insurance against loss in the forex market only by using the strategy of Forex swap.

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The top 5 trading currencies in the Forex Market

October 19, 2011 By clintstarr Leave a Comment

The top 5 trading currencies in the Forex Market

Currencies are traded for profit on the Forex Market, with traders speculating on the value of international currencies before exchanging one for another.Opening each day in Australia and closing in New York, Forex operates across international time zones, trading currencies 24/7.

Read on for more on currency trading and the top five Forex traded currencies …

Who trades currencies?

Banks, businesses and individuals each use Forex to trade currencies.

Why trade currencies?

Traders speculate on fluctuations in international currency values to make a profit by trading currencies on the Forex market.

It’s been estimated that 95 per cent of Forex transactions are carried out as a form of profit speculation, while 5 per cent facilitate international payments and currency conversions in daily commerce.*

Why do Forex currency values fluctuate?

Fluctuations in currency values allow traders to profit by trading one currency for another.

Although currency values tend to fluctuate slightly throughout any given day, international currency values can seriously depreciate or appreciate depending

on a region’s economic and political stability, allowing for significant profits or losses to be made when trading one currency for another.

Trading currencies on the Forex market:

Each Forex transaction involves the purchase of one currency and the simultaneous sale of another.

As such, Forex traders refer to currencies in pairs. A currency pair is made up of the two currencies exchanged during any one given Forex transaction.

Some currency pairs are traded more often than others on the open Forex market. The seven most traded currency pairings are called major currency pairs, while other less-common couplings (especially those which don’t feature the USD) are known as cross-currency pairs.

Experts advise new traders to begin trading using the major currency pairs.

The Top 5 Forex traded currencies are:

  1. USD
  2. EUR
  3. JPY
  4. GBP
  5. AUD

The top 5 Forex traded currencies explained:

The seven most traded currency pairs on the Forex market – the major pairs – are thought to account for 75 to 80 per cent of Forex’s daily trading volume**, meaning some currencies are traded much more frequently than others.

Each of the top 5 Forex traded currencies is a part of at least one of Forex’s seven major currency pairs.

The US Dollar

The US Dollar is the central currency against which all other currencies are traded. As a result, most Forex transactions involve trading the USD for another currency.

The Euro

The EUR/USD is the most actively traded Forex currency pair, and by some estimates accounts for 28 per cent of daily Forex trading***.

The Japanese Yen

The JPY/USD is the second most actively traded Forex currency pair, and is thought to account for 13 per cent of daily Forex trading****. JPY/USD is generally used as the regional currency proxy for China and other Asian countries.

The Great British Pound

The GBP is most commonly traded against the Euro and the US Dollar – the two most traded Forex currencies. The GBP/USD currency pair is estimated to account for 12 per cent of Forex’s daily trading volume.

The Australian Dollar

The AUD is commonly traded against the USD to comprise one of Forex’s seven major currency pairs, explaining the AUD’s entry as the fifth most traded Forex currency.

Author Bio

Clint is a part of the digital blogging team at cashzilla.co.uk who work with big finance brands and Forex trading sites. For more information about me, or to keep up to date with the latest in finance news, check out my posts at cashzilla.co.uk or visit my Twitter account, @cashzilla.

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Parabolic SAR Dot Breakout Strategy

May 26, 2011 By Raj 5 Comments

The strategy is very simple and works very well. You can find a lot of trading opportunities using this strategy. This strategy involves only parabolic SAR indicator with default settings.

Indicators:

Parabolic SAR with default settings (Step: 0.02, Maximum: 0.2)

Time Frame: Hourly

But you need to observe the parabolic SAR on the higher time frame of daily chart.

Markets Sessions Suitable:

Do not use this method during Asian market session. Normally this set up works before the beginning of UK market where breakouts occur.

Long Trade:

Parabolic SAR dots must be below the daily time frame candlesticks.

Parabolic SAR dots must be above the hourly candlestick and a strong bullish candlestick should cross the last Parabolic SAR dot in the upward direction.

Stop Loss:

Use a stop loss of 5 pips below the entry candlestick.

Take Profit:

Use a take profit of two times the body of the candlestick that passed through the parabolic dot.

Example:

The following is a NZDUSD daily chart and I have drawn two blue lines and highlighted the area where all the parabolic dots are below the daily candlesticks.

NZDUSD Daily Trend

Now go to the one hour chart. The following is the one hour chart for the same and since this is a long picture I divided into two parts. The following is the first part. You can see the trading opportunities and we have two trading opportunities in the first part.

NZDUSD Hourly Chart Opportunities 1 and 2

The following is the second part of the picture. You can see two more trading opportunities but one is a lost trade.

NZDUSD Hourly Chart Opportunities 3 and 4

So in total, you can see four trading opportunities out of which three are winning trades and one is a losing trade.

Short Trade:

Parabolic SAR dots must be above the daily time frame candlesticks.

Parabolic SAR dots must be below the hourly candlestick and a strong bearish candlestick should cross the last Parabolic SAR dot in the downward direction.

Stop Loss:

Use a stop loss of 5 pips above the entry candlestick.

Take Profit:

Use a take profit of two times the body of the candlestick that passed through the parabolic dot.

Example:

The following is a EURCHF daily chart and I have drawn two blue lines and highlighted the area where all the parabolic dots are above the daily candlesticks.

EURCHF Daily Trend

Now go to the hourly chart. Here I am showing only part of the hourly picture as there are a lot of trading opportunities and there will be a lot of pictures. You can see the trading opportunities in the following picture.

EURCHF Hourly Chart Opportunities 1 and 2 and 3

Note: Always move your stop loss to your entry when you are in some profit.

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Forex Aroon Indciator

May 26, 2011 By Raj Leave a Comment

What is Aroon Indicator?

Aroon indicator is a technical analysis indicator used by many forex traders to find

  • Whether the price is trending
  • Whether the price is moving sideways
  • The strength of the trend, if the price is trending

Aroon indicator mainly consists of two lines.

  • Aroon Up Line
  • Aroon Down Line

This indicator ranges between 0 and 100 like a stochastic oscillator.

Aroon indicator is used to find the changes in the trend and whether the trend will continue or not.

The following picture shows you the Aroon indicator. The blue line represents the Aroon Up line and the red line represents the Aroon Down line.

Aroon Indicator

Aroon Indicator Formula:

Since Aroon indicator is made up of two lines, Aroon Up and Aroon Down, each line has its own formula.

Aroon Up Formula:

(No. of Periods – No. of Periods since the Highest High during that time)

—————————————————————————————————— X 100

No. of Periods

Aroon Down Formula:

(No. of Periods – No. of Periods since the Lowest Low during that time)

———————————- ——————————————————————- X 100

No. of Periods

For calculating the Aroon Up and Aroon Down Lines, a specific number of periods is used. The default is 14 periods.

Trading Arron Indicator:

Aroon indicator is used to find the trend in the following ways. Normally levels of 30, 50 and 70 are used by many traders for this.

  • If the Aroon Up line is above the 70 line, it indicates a strong uptrend.
  • If the Aroon Down line is above the 70 line, it indicates a strong downtrend.
  • If the Aroon Up and Down lines move parallel to each other, it indicates that the price is consolidating.
  • If the Aroon Up is below the 50 line, it indicates that the uptrend is weakening.
  • If the Aroon Down is below the 50 line, it indicates that the downtrend is weakening.
  • If the Aroon Up crosses the Aroon Down line upwards, it signals that an uptrend is forming. (You may need other indicators to confirm this.)
  • If the Aroon Down crosses the Aroon Up line upwards, it signals that a downtrend is forming. (You may need other indicators to confirm this.)

Aroon Up line above 70 line:

When the Aroon Up line is above the 70 line, it indicates a strong up trend. Check the following picture. This is a AUDCAD hourly chart and you can see that the Aroon Up line, which is the blue line, is above the 70 line and there is a strong uptrend.

Aroon Up Above 70 Line

Aroon Down Line Above the 70 Line:

When the Aroon Down is above the 70 line, it indicates a strong down trend. Check the following picture. It is again AUDCAD hourly chart. You can see the highlighted area where the Arron Down line, which is the red line is above the 70 line and there is a strong down trend.

Aroon Down Above 70 Line

Aroon Up and Down moving parallel to each other:

When the Aroon Up and Down lines move parallel to each other, it indicates that the price is consolidating. Check the following picture. It is a chart. You can see the highlighted area where the Aroon Up and Down lines are moving parallel to each other. You can see the price consolidation here.

Aroon Up and Down Parallel to Each Other

Aroon Up below the 50 Line:

When the Aroon up crossed below the 50 after a long uptrend and it is below 50 line, it means that the uptrend is weakening. Check the following picture. It is a NZDUSD daily chart and you can see that the Aroon up is above the 70 for quite some time and at one point it crossed the 50 line downwards and stayed below the 50 line for some time. You can see that the uptrend became weak.

Aroon Up Below the 50 Line

Aroon Down below the 50 Line:

When the Aroon down crossed below the 50 after a long downtrend and it is below 50 line, it means that the downtrend is weakening. Check the following picture. It is a EURJPY hourly chart and you can see that the Aroon Down is above the 70 for some time and at one point it crossed the 50 line downwards and stayed below the 50 line for some time. You can see that the downtrend became weak.

Aroon Down Below the 50 Line

Aroon Up Crosses Aroon Down Line Upwards:

When the Aroon Up Crosses the Aroon Down Line it indicates that an uptrend might be forming. This may not be true always, but you have to use additional indicators to confirm this. Check the following picture. It is a EURJPY daily chart and you can see that the Aroon Up indicator crossed the Aroon Down indicator upwards and it formed an uptrend.

Aroon Up Crosses the Aroon Down Line Upwards

Aroon Down Crosses the Aroon Up line Upwards:

When the Aroon Down line crosses the Aroon Up Line upwards, it indicates that a downtrend might be forming. This may not be true always so you may have to use additional indicators to confirm this. Check the following picture. It is a EURJPY daily chart and you can see that the Aroon Down line crossed the Aroon Up line upwards and it formed a down trend.

Aroon Down Crosses the Aroon Up Line Upwards

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Metatrader Pivot Point Indicators

May 24, 2011 By Raj 2 Comments

Drawing pivot points in metatrader:

If you use metatrader and want to draw pivot points, you can manually calculate the pivot points and draw them on the charts. But it takes a lot of time to do it for different currency pairs. There are already a lot of custom indicators available on the net where you can download and use them for calculating the different pivot points. The following will give you the resource links where you can download different indicators for drawing the pivots on your metatrader platform charts.

Installation of the custom indicators:

Download the indicators and save them under the indicators folder under the experts folder in your metatrader folder. Restart your metatrader application and you will be able see the indicators and use them.

ZMFX all pivot levels Indicator:

ZMFX all pivot leves indicator draws the daily, weekly and monthly pivot points, support and resistance lines on the same chart. You can change the properties to display only the daily pivots or only the weekly pivots or only the monthly pivots or a combination of any two or all the three.

You can download this indicator at

http://codebase.mql4.com/7421

ZMFX All Pivot Levels Indicator

DeMarker Pivots Indicator:

This indicator is based on the Tom DeMarks pivot formula. This indicator draws the daily pivot point, support and resistance lines.

You can download this indicator at

http://codebase.mql4.com/486

DeMarker Pivots Indicator

Fibonacci Pivots Indicator:

This indicator is based on the Fibonacci pivots formula. This indicator draws the daily pivots, support and resistance lines.

You can download the indicator at

http://codebase.mql4.com/1985

Fibonacci Pivots Indicator

Fibo Pivot Lines GMT Indicator:

This is another Fibonacci Pivot indicator. This also draws the daily pivots, support and resistance lines.

You can download this indicator at

http://codebase.mql4.com/588

Fibo Pivot Lines GMT Indicator

Daily Pivot Points Indicator:

This indicator drwas the daily pivot, resistance 1, 1.5, 2, 2.5, 3 and support 1, 1.5, 2, 2.5, 3 lines on the chart.

You can download this indicator at

http://codebase.mql4.com/307

Daily Pivot Points Indicator

Waddah Attar Pivot Indicator:

This indicator shows only the pivot points but not the support and resistance lines. It shows the daily pivot point, weekly pivot point and the monthly pivot point.

You can download this indicator at

http://codebase.mql4.com/3862#22515

Waddah Attar Pivot Indicator

Pivot Points in Forex Trading
Calculating Pivot Points
Methods to Calculate Pivot Points
Trading Pivot Points
Metatrader Pivot Point Indicators

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Trading Pivot Points

May 24, 2011 By Raj Leave a Comment

Trading Pivot Points:

Pivot points are mainly used for range trading and break out trading.

Breakout Trading:

Put a daily pivot on a 15 min. chart. If the price opens above the pivot line at the beginning of the day, identify any channels or trend lines. Once the trend line is broken, trade in the direction of breakout until the price reaches the pivot line or the first resistance line. The same is for break outs below the pivot line.

Check the following picture. The following is a USDCAD 15 min. chart on which a daily pivots are placed. The price is open above the pivot line and after sometime a channel is formed. The channel is broken at some particular point and this is entry. Exit the trade once it reaches the first resistance line.

Pivot Points Breakout Trading

Support or Resistance Lines Breakouts:

When the price breaks the first resistance or support line with a strong candlestick enter the trade in the direction of price break. Trade until the second support or resistance line. Check the following picture. In the following picture the price has broken the first resistance line with a strong candlestick and moved until the second resistance line.

Pivot Points Resistance Line Breakout Trading

Price reversal at the support or resistance lines:

When the price reverses at the support or resistance lines enter a trade and trade until the pivot line or until the previous support or resistance line. Check the following picture. In the following picture the price is reversed two times. First reversal occurred at the first support line and the second reversal occurred at the first resistance line.

Price Reversals at Support or Resistance Lines

The above are some of the methods how pivot points are used in forex trading. Sometimes these may not work so always use additional indicators for confirmation.

Pivot Points in Forex Trading
Calculating Pivot Points
Methods to Calculate Pivot Points
Trading Pivot Points
Metatrader Pivot Point Indicators

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Methods to Calculate Pivot Points

May 24, 2011 By Raj 2 Comments

Other Methods to Calculate Pivot Points:

There are different methods available to calculate pivot points. The following are some of them.

  • Camarilla Pivot Points
  • Tom DeMark Pivot Points
  • Woodies Pivot Points
  • Fibonacci Pivot Point System
  • 5 point pivot system (Most common method)

Camarilla Pivot Points:

The following formula is used to calculate the camarilla pivot points.

R4 = CLOSE + RANGE * 1.1/2

R3 = CLOSE + RANGE * 1.1/4

R2 = CLOSE + RANGE * 1.1/6

R1 = CLOSE + RANGE * 1.1/12

PP = (HIGH + LOW + CLOSE) / 3

S1 = CLOSE – RANGE * 1.1/12

S2 = CLOSE – RANGE * 1.1/6

S3 = CLOSE – RANGE * 1.1/4

S4 = CLOSE – RANGE * 1.1/2

Where PP is the pivot point, R1, R2, R3 and R4 are the resistance lines and S1, S2, S3 and S4 are support lines.

For example if you want to calculate the daily camarilla pivot points,

HIGH – Previous day’s high

LOW – Previous day’s low

CLOSE – Previous day’s close

RANGE – Previous day’s HIGH – LOW

Tom DeMark’s Pivot Points:

If Close < Open then X = (H + (L * 2) + C)

If Close > Open then X = ((H * 2) + L + C)

If Close = Open then X = (H + L + (C * 2))

R1 = X / 2 – L

PP = X / 4

S1 = X / 2 – H

Woodies Pivot Points:

R4 = R3 + RANGE

R3 = H + 2 * (PP – L) (same as: R1 + RANGE)

R2 = PP + RANGE

R1 = (2 * PP) – LOW

PP = (HIGH + LOW + (TODAY’S OPEN * 2)) / 4

S1 = (2 * PP) – HIGH

S2 = PP – RANGE

S3 = L – 2 * (H – PP) (same as: S1 – RANGE)

S4 = S3 – RANGE

Fibonacci Pivot Points:

R3 = PP + ((High – Low) x 1.000)

R2 = PP + ((High – Low) x .618)

R1 = PP + ((High – Low) x .382)

PP = (H + L + C) / 3

S1 = PP – ((High – Low) x .382)

S2 = PP – ((High – Low) x .618)

S3 = PP – ((High – Low) x 1.000)

C – Closing Price, H – High, L – Low

Pivot Points in Forex Trading
Calculating Pivot Points
Methods to Calculate Pivot Points
Trading Pivot Points
Metatrader Pivot Point Indicators

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Calculating Pivot Points

May 24, 2011 By Raj Leave a Comment

Calculating Pivot Points:

The most common method in calculating pivot points is the 5 point pivot system. The following are the formulas to calculate the pivot points.

RESISTANCE2 = PIVOT + (RESISTANCE1 – SUPPORT1)

RESISTANCE1 = (PIVOT*2) – LOW

PIVOT = (HIGH + LOW + CLOSE)/3

SUPPORT1 = (PIVOT*2)-HIGH

SUPOORT2 = PIVOT – (RESISTANCE1 – SUPPORT1)

Let’s calculate the daily pivot points for the day 5/20/2011. For this we need the High, Low and Close of the previous day which is 5/19/2011. The following are the High, Low and Close of the previous day.

High – 1.43363

Low – 1.42053

Close – 1.43224

Daily Pivots for 5/20/2011:

Pivot = (HIGH + LOW + CLOSE)/3 = (1.43363 + 1.42053 + 1.43224)/3 = 1.4288

Resistance 1 = (PIVOT*2) – LOW = (1.4288*2)-1.42053 = 1.43707

Support1 = (PIVOT*2)-HIGH = (1.4288*2)- 1.43363 = 1.42397

Resistance 2 = PIVOT + (RESISTANCE1 – SUPPORT1) = 1.4288 + (1.43707-1.42397) = 1.4419

Support2 = PIVOT – (RESISTANCE1 – SUPPORT1) = 1.4288 – (1.43707 – 1.42397) = 1.4157

Once we draw pivot points on the hourly chart it looks like the following and you can see the price range in that.

Pivot Points Calculation

Pivot Points in Forex Trading
Calculating Pivot Points
Methods to Calculate Pivot Points
Trading Pivot Points
Metatrader Pivot Point Indicators

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