20.04.2019
AAKASHAYA PATRA SEVEN STAR SMART EDUCATION SERIES PART – 5
Pivot Point
• Pivot
Point : It is a technical analysis indicator
used to determine the overall trend of the market over different time frames.
•
The pivot point itself is simply the average of the high, low and closing
prices from the
previous
trading day.
•
On the subsequent day, trading above the pivot point is thought to indicate
ongoing bullish sentiment, while trading below the pivot point indicates
bearish sentiment.
A
pivot point and the associated support and resistance levels are often turning
points for the direction of price movement in a market.
•
In an up-trending market, the pivot point and the resistance levels may
represent a resistance level in price above which the uptrend is no longer
sustainable and a reversal may occur.
•
In a declining market, a pivot point and the support levels may represent a low
price level of stability or a resistance to further decline
Pivot level Calculation
•
Standard Pivot Points:
• Pivot = ( H + L + C ) / 3
• R3 = H + 2( Pivot –
L)
• R2 = Pivot + ( H - L )
• R1 = ( 2 x Pivot ) -
L
• S1 = ( 2 x Pivot ) –
H
• S2 = Pivot - ( H - L )
• S3 = L - 2( H - Pivot
)
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