Axis trading is one of the trading methods commonly used by foreign exchange traders. Because it is simple and convenient, it is often directly put into the process of analysis and judgment by traders. The important support points and resistance points in the market are generally distributed on a specific axis, and the probability that the exchange rate touches the axis is shown in the form of probability, and the exchange rate generally fluctuates here. Investors can predict the direction of market changes according to the probability relationship, so as to find the breakthrough point of the market.

Determination of axis point

The pivot point, support point and resistance level are calculated according to the opening price and closing price of the last trading cycle, and the specific calculation method is as follows:

Axis point (PP) = (high+low+close) /3

The first support level? (s 1)=(2 * PP)- high

The first resistance level? (r 1)=(2 * PP)- low

Second support level? (S2)= PP- (high-low)

Second resistance level? (R2) = PP+(high-low)

Application skills of pivot point

When the exchange rate touches the axis point pp, you can wait for the exchange rate to return to the support level s 1 or the resistance level R1; When the exchange rate touches r 1, wait for the exchange rate to return to the position of axis point pp or r2; When the exchange rate reaches s 1, wait for the exchange rate to return to s2 or the position of axis point pp; And so on.

If there is no obvious fluctuation in the exchange rate, the exchange rate usually fluctuates between s 1 and r 1, and only when the market is fierce will it break through s2, r2 or even s3 and r3.

Axis trading is relatively simple, convenient to use and more suitable for novices. Using the axis to determine the support point and resistance point can make your analysis conclusion more accurate and realize profit. It can also be used with other technical indicators.