Pivot Points When Trading Forex
Pivot Points at a Glance
Pivot Points Explained
Pivot Points are frequently used by Forex professional traders. A pivot point is calculated as the average price of high, low, and closing price based on the previous trading day. Some traders are using also the opening prices to calculate the pivot point, therefore, the pivot, in that case, is the average price of Open, High, Low and Close.
-The price of financial assets tends to test heavily the pivot points before move higher or lower, therefore, pivots determine support and resistance levels
-If the price of an asset is trading above the pivot point is thought a bullish market and if it is trading below the pivot point indicates a bearish market
-The accuracy of trading signals based on pivot pivots increases at times when a formation of a Japanese candlestick is also identified
Parabolic SAR when Trading Forex
The Parabolic SAR is widely used Forex traders as it offers an easy way of determining instantly the price trend.
At a Glance
The Parabolic SAR is a directional indicator used to determine the price direction of any financial asset. It was developed by J Welles Wilder Jr.
Parabolic SAR Explained
The Parabolic SAR is widely used as an easy way of determining the price trend. Furthermore, it provides an easy framework for identifying when to enter and when to exit the market. As an indicator, it is fully visualized as it plots a series of dots or dashes which are able to pinpoint the real price action.
Here are the main advantages when using the Parabolic SAR:
(1) Can be used by all trading styles and in all timeframes (from tick price charts and up to monthly charts)
(2) Easy to use signaling system, even for beginners
(3) Parabolic SAR can generate tens of trading signals on a daily basis
(4) Can be used to analyze any financial market and any asset (stocks, indices currencies, commodities)
(5) Determines also the take-profit and stop-loss levels