The pivot point and associated support and resistance levels are
calculated by using the last trading session's open, high, low, and
close. Since forex is a 24-hour market, most traders use the New York
closing time of 4:00pm EST as the previous day's close.
The calculation for a pivot point is shown below:
Pivot point (PP) = (High + Low + Close) / 3
Support and resistance levels are then calculated off the pivot point like so:
First level support and resistance:
First resistance (R1) = (2 x PP) - Low
First support (S1) = (2 x PP) - High
Second level of support and resistance:
Second resistance (R2) = PP + (High - Low)
Second support (S2) = PP - (High - Low)
Third level of support and resistance:
Third resistance (R3) = High + 2(PP - Low)
Third support (S3) = Low - 2(High - PP)
The calculation for a pivot point is shown below:
Pivot point (PP) = (High + Low + Close) / 3
Support and resistance levels are then calculated off the pivot point like so:
First level support and resistance:
First resistance (R1) = (2 x PP) - Low
First support (S1) = (2 x PP) - High
Second level of support and resistance:
Second resistance (R2) = PP + (High - Low)
Second support (S2) = PP - (High - Low)
Third level of support and resistance:
Third resistance (R3) = High + 2(PP - Low)
Third support (S3) = Low - 2(High - PP)
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