Pivot Points are a trader's best friend, offering a clear view of potential market directions throughout the day. They simplify the decision-making process, helping you stay one step ahead.
This handy indicator also lays out the first three levels of support and resistance, giving you a better edge in your trades.
Here’s the formula you'll want to keep in mind:
Resistance 3 = High + 2 * (Pivot - Low)
Resistance 2 = Pivot + (R1 - S1)
Resistance 1 = 2 * Pivot - Low
Pivot Point = (High + Close + Low) / 3
Support 1 = 2 * Pivot - High
Support 2 = Pivot - (R1 - S1)
Support 3 = Low - 2 * (High - Pivot)
These calculations are based on the data from the previous day’s trading bar, so you’re always working with the latest insights.
The orange line represents today’s pivot point, while the red lines indicate support levels and the green lines show resistance levels. Understanding these lines can significantly enhance your trading strategy!
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