Understanding Pivot Points

Pivot points are very interesting to me. especially when I can use them to increase the number of zero's in my trading account.

THINGS I KNOW ABOUT PIVOT POINT

Pivot point are points reached by a support or resistance level which than reverse in the opposite support or resistance levels. Pivot points can be compared to a pendulum ball that goes back and forth. many traders like me use pivot points to identify important support and resistance level. they are important because at this levels the price can change direction, which could be a loss or a gain.

I use pivot points for my short term trades especially for scalping, taking advantage of all those small price changes between pivot points.

HOW TO CALCULATE PIVOT POINTS

You don't need to know how to calculate pivot points many forex plate forms do it for you. But, just for fun (as they say where i come from no knowledge is a waste). to calculate pivot point you will have to know the last sessions Open, High, Low, and Closing prices.

this is the formular to calculate pivot point:

PP = ( High + Low + Close) /3

Since pivot points are directly related to support and resistance levels, you will have to calculate the pivot point for each support and resistance level.

Formular for the first pivot point support level:

Support 1 = ( 2* PP) - High price

Formular for the first resistance pivot point level:

Resistance 1 = ( 2* PP) - Low

This is just for the first level, I really don't won't to go any further before I get accused of being a mathematical show off, and as I said earlier this calculation is already done my most plate forms. And from what I have seen many of this  trading plate forms even give additional pivot point, like pivot points in between support and resistance levels, and many other features.

Thank you for reading.