It is considered the focal points (Pivot Point), or as some call it the focal points or orbit or rotation Points Points are common indicators used by traders in the Forex markets. Especially for traders every day, but it is losing some of its importance for traders in longer time frames. The main reason that gives the focal points of high popularity is that they are a quick way to find out support and resistance potential in the market.
Possible to see points of support and resistance zones are based on the idea of freely expected volatility in the pair, it has historically had begun to "dig" futures as a quick way to search for opportunities to open and close the transaction during the deliberative session. There are people who are discovering the focal point on a long-term time frames, but every time you meet, it is almost always in short frame table. In fact, there are short-term traders do not use only pivot points.
It supports some platforms pivot points, but If you use a deliberative platform is not supported, you can easily calculate and put in place. For you for traders who use the platform "Meta Trader 4" (MT4), there are a lot of indicators available for installation on the spread of the Internet and forums that will calculate these points automatically, and some brokers also provide the tools to do just that.
How do you calculate the focal point?
Is computed axial levels using three types of information from the previous day deliberative:
1. higher price.
2. lowest price.
3. The closing price.
It is clear that in order to find the high and the low price and the closing price of the previous day, all you have to do is to look at the candle from the previous session. The many traders put the fulcrum of these three prices on the shorter time frames, such as schedules and time tables fifteen minutes. You can pivot points that tells you when it will fall and the market change direction with the traders short period of others follow them for the near future.
In order to calculate these focal points, you must use the following equation:
· Fulcrum = (yesterday's high + yesterday's close + Decreased yesterday) / 3
· Resistance point = 1 (the focal point × 2) - Impairment of yesterday.
· Support point 1 = (focal × 2 points) - The high yesterday.
· Resistance 2 points = fulcrum + (high yesterday - yesterday's decline).
· Support point 2 = fulcrum - (rise yesterday - yesterday's decline).