Forex Pivot Points Book. Series of Free Forex ebooks
Step-by-step guide and strategy on using Pivot Points in Forex
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How to calculate Pivot points?
Pivot points study provides traders with 5 major levels:
R2 — Second Resistance
There are also additional levels, such as R3, S3 — third resistance and support, as well as Mid-points — middle levels between the major levels.
There are no limits on how many Pivot levels to use, however, one should remember, that making complex charts makes trading complicated as well. We would suggest sticking to 5 major Pivot point levels, around which most of the price action takes place.
The formula for calculating Pivot points is next:
Major 5 levels:
R2 = Pivot + (High — Low) (same as R2 = Pivot + (R1 — S1))
R3 = High + 2 * (Pivot — Low)