Pivot Point (PP) is a point of balance - level toward which the prive gravitate during the day, having 3 values for previous day: maximum, minimum and the price of closing calculate 13 levels for smaller time frames: the point of equilibrium 6 levels of opposition and 6 levels of support.
The given levels are called reference points. the reference points let define the change of direction of small trend easy. the most important 3 values are reference points level, Resistance 1(RES1.0) and Support (SUP1.0). At the movement of the price between these values the pauses are often seen in the movement sometimes even returns.
predicts the range of variation in prices;
shows where the price can stop;
shiws the possible change points of direction of the price movement.
If the market in the current day opent above the point of equilibrium, it is a signal for opening long positions. If the forex market opens below the point of equilibrium, the current day is a good for opening the short position.
the tuchnique of usage of reference point consist in the tracking of turns possibilities or disruption at the clash of prices with the opposition levels RES1.0 or support SUP1.0. To the moment when the price reaches the RES2.0, Res3.0 or SUP2.0, SUP3.0 levels the forex market, as a rule, can be outbided or reselled so that these levels use mostly in the capacity of exit levels.
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