How to use the pivot point:
A very important aspect that the pivot point needs to understand is that each price can be used as a support level or a resistance level. For example, the price of R 1 is generally a strong resistance level. However, if the price breaks through and then falls back to this price, it is also a strong support level.
If the price is lower than the fulcrum (vot), it means that market sentiment may be negative; If the price is higher than the fulcrum (vot), it means that the market sentiment may be positive.
With all support and resistance positions, we can give full play to the numerical advantage. The more central points in a row, the more likely the price will react at these prices. Therefore, if the weekly axis and the daily axis are at the same price, it may constitute a stronger support level or resistance level.
Type of pivot point
There are many different types of axis points used for calculation, all of which are centered on the main axis point (vot) or the daily axis point (that is, the point with which the market changes as the "center"). After calculating the center point of the spindle, it can be used to calculate other corresponding axis points.
The axis point above the sun axis point is called the resistance axis point, and it is marked as R 1, R2, etc. Below the solar axis are the supporting axis points, marked as S 1, S2, etc.
Five-point system is most commonly used in calculation. These five points are
Intermediate axis point
Two resistance levels: (R 1) and (R2)
Two supported locations: (S 1) and (S2)
Intermediate axis point
The pivot point between two pivot points is called the central axis point. They are marked in different forms in the chart. The axis between S 1 and S2 is marked as M 1, and the axis between S 1 and vot is marked as M2.
Calculate pivot point:
If the calculation result is price, it refers to the price of the previous period, for example, the closing price is the closing price of the previous day.
Spindle center/pivot point
Axis point = (highest price+lowest price+closing price) /3
The first resistance level R 1
R 1 = (pivot point * 2)- lowest price
Resist R2 for the second time
R2 = pivot point+(highest price-lowest price)
The first support level S 1
S 1 = (axis point * 2)- highest price.
Second support level S2
S2 = pivot point-(highest price-lowest price)
Calculate the intermediate axis point
The center axis point is just between the centers of the two main shafts. Calculate the intermediate axis point according to the following formula:
M 1= (S2+S 1)/2
M2= (S 1+PP)/2
M3 = (R 1+PP)/2
M4 = (R2+R 1)/2
There is a tool to calculate the pivot point on the trading platform.
It should be noted that there are many drawing packages that automatically calculate pivot points on the market, such as Meta Trader4, and a customized pivot point calculator can be installed. However, it is useful to know the calculation formula in case it is needed.
Different closing times will affect the calculation.
Different closing prices in different markets will affect the calculation.
For example, the foreign exchange market is open 24 hours a day, so it is difficult to determine the closing price.
On the contrary, the stock exchange has a clear closing time, so the closing price is easier to determine. But for the foreign exchange market, there is no opening and closing time in the whole market within one week. So be sure to choose the price of a specific trading period as the closing price.
The following are the most commonly used closing times in major markets.
Stock traders use the closing price of 06: 00 pm Eastern Standard Time+65438 as the settlement price.
Hold e-mini s&; P, Nasdaq and Russell futures traders take 15: 15 as the closing time. Traders holding mini Dow contracts on the Chicago Board of Trade will close at 16:00 Central Time.
Foreign exchange traders usually take the closing price as 16:00 (the settlement time of new york Bank) or midnight in London.
Calculate the axis points of the weekly and monthly lines.
Calculate the axis of the weekly line with the opening price on Sunday night and the closing price on Friday.
Calculate the axis of the monthly line with the opening price on the first day of each month and the closing price on the last day of each month.
abstract
So far, I have learned …
... axis points are horizontal support line and resistance line.
... they can be used like normal support levels and resistance levels.
... using the previous highest price, lowest price and closing price to calculate the spindle center.
… calculate the corresponding axis point according to the axis point of the spindle.
... axis point above spindle center point is resistance axis point, marked as R 1, R2, etc.
... =' class1' > the pivot point below the spindle center point is the support pivot point, marked as S 1, S2, etc.
... if the price is above the center of the spindle, the market sentiment is generally positive; If the price is lower than the main axis, the market sentiment is usually negative.
... different closing times in different markets will affect the calculation. This means that you should know the closing time of the market where you trade.