Technical Analysis Part 5

 Donwload my chart for better understanding

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Pivot point: Expert trader and also market maker use pivot points in order to identify potential support and resistance level. Remember many traders watch this level so you should take an eye with it.It is useful for the short time frame who wish to catch some pips very quickly. You can learn to trade just look at this level and identify major trending.

Pivot point calculating = (High + low + close price) / 3
1st resistance level (R1) = 2*pivot point - Low price
1st support level (S1) = 2*pivot point - High price
2nd resistance level (R2) = PP + (High - Low)
2nd support level ( S2) = PP - (High - Low)
3rd resistance level (R3) = High + 2 (PP-Low)
3rd support level (S3) = Low - 2 (PP-High)

Another way calculating pivot points are woodie (High+Low+2*close/4), Camarilla, Fibonacci method. Which way is best? Ow..w this depends on your trading style.

You don't calculate it while available indicator has done this job for you. Search over the internet such an indicator which feel you comfortable.

Remember the following while use Pivot point:

*watch if the price come to pivot point if price ranging at pivot level after it will go a certain direction.
*watch if the price above R1/R2/R3 level then the price will drop down.
*watch if the price below S1/S2/S3 level then price will go up.
*watch market movement carefully for understanding major movement.