Forecast Price using Pivot Point Analysis – Part 2

October 5, 2009

The basis of pivot point formulas, which traders use to calculate pivot point numbers, involves several steps. Traders should be able to interpret the rationale behind the calculations.

According to the traditional formula, the pivot point is considered as the average of the previous session’s trading range combined with the closing. The support and resistance levels that are calculated from the formulas indicate the potential trading ranges for the next trading session, based on the past weight of the market’s strength or weakness derived from calculating the high, low, and distance from the close of those points.
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