Three Main Points in Forex

These pivot points are used in foreign exchange since long time even before the invention of computers and was originally used by floor traders.

This is one of the best ways for floor traders to have an idea about the trades before the actual trade starts and have the resistance and support levels of the next forex session.

The pivots of the Forex helps to find out the market direction of the day trading with just few calculations traders are able to found the resistance and support levels of coming sessions.

By using simple arithmetic rules and the last day’s trade high, low, close and a series trade points can be computed easily.

These are the critical support and resistance levels and the pivot, support and resistance area calculated collectively from that data are considered as pivot levels.

The Forex market is the market where everyday has some changed high, lows, opening and closing prices that are different from the last day trade and although the Forex market is twenty-four hour trading platform yet the usual timing are 5pm EST is used to recognize the opening and closing prices for further trading using pivots.

The pivot points are very popular among Forex traders because they are leading signals of the market that means they play a predictive role in forex trade as they give the prior information of trade points before the actual trading starts.

The traders can use the previous day trade points and levels to predict the potential of the market and trade points for the upcoming session.

The three main points that are considered here are R1, S1 and actual pivot points.

The basic reason behind trading with pivot points is to find out the reversal or breakout point of the Forex trade that is R1 or S1. With the passage of time R2, R3, R4 or S2, S3 indicates about the already overbought or oversold trade levels that are used as exit ways not the entry doors in Forex.

While using pivot points in Forex the trading above the pivot level and then pause at R1 then further move to R2. This would lead the trader to a break point of R1 with the target of R2 and if the Forex trade is close to half at R2 and then move to R3 according to the rest of the trading position in the market.

The article gives information regarding the pivot points in Forex and the measurement ways of resistance, support and the pivot point of the Forex trade.