Wednesday, 10 Sep 2014
by Admin
in
Learn Trading Terms
The formula used in the calculation of Classic Pivot Points are:

RANGE is the High minus the Low for the given time frame (usually daily).HIGH = High prices of the previous trading session.
LOW = Low prices of the previous trading session.
CLOSE = Closing prices of the previous trading session.

RANGE = HIGH - LOW

Where PP is the Pivot Point

PP (Pivot Point) = (HIGH + LOW + CLOSE) / 3

Where S1 through S4 are support levels 1 to 4

Support Point : S1,S2,S3,S4
S1 = (2 * PP) - HIGH
S2 = PP - RANGE
S3 = S2 - RANGE or PP - RANGE * 2)
S4 = S3 - RANGE or PP - RANGE * 3)

Where R1 through R4 are Resistance levels 1 to 4

Resistance Point : R1,R2,R3,R4

R1 = (2 * PP) - LOW
R2 = PP + RANGE
R3 = R2 + RANGE or PP + RANGE * 2)
R4 = R3 + RANGE or PP + RANGE * 3)
See Also What is Pivot Points ?, How to Trade with Classic Pivot Points ?, Camarilla Pivot Points, DeMark Pivot Points, Woodie Pivot Points,