Forex Analisys part 4
Quite good. US $ 2000 if used as Dollar. That's just 1 lot you know. What if we put up the bigger lot as the more money we have? It can be bigger and bigger. That is why many foreign traders are trading to finance their lives (even their wives' children) on a daily basis. The term is cool Trading for a Living. Hmm ... quite seductive is not it? Simply from home alone and do not need to travel congestion of big cities, hundreds to tens of thousands of dollars can we produce only from trading. Thus trading can also help the quality of life of those who do it and also reduce pollution on the highway (he ... he ... he). Just imagine how the effect will result if you succeed in making the right trading formula for yourself personally. A financial breakthrough (financial independence) becomes part of your life and you can now leave destiny to be your lifelong employee. Hmmm…. Sweet dream heh? So actually from what we learned today it is known that basically the advantages and disadvantages that may occur are comparable to each other. Market can be the best friend for any profit. Instead he can be the harshest enemy you meet because it can meludeskan your investment in the blink of an eye. Well before you go any further with your lesson. It seems that who wants to invest forex should be someone who likes a price adventure aka risk lover. If you are a risk averter aka those who do not like risk, please stay away and choose a less risky investment like forex.
Pivot Points
Pivot Points is a calculation method to determine the area of support and ressisatance. He is not an indicator, but is still regarded as a branch of technical analysis because both make decisions based on past projections. Consider the following formula:
Pivot point = (H + L + C + O) / 4
R1 = (2 x P) - L
R2 = P + (H - L)
S1 = (2 x P) - H
S2 = P - (H - L)
The above formula is the formula in the calculation of Support Ressistance by using pivot points. The meanings of O, H, L, C and P are Open, High, Low, Close and Pivot on a candlestick chart respectively. R and S are Ressistance and Support. In contrast to soups and resses using price history, on the Pivot, we can use the point of soup and ress that layered even up to several times. Let's look at the example calculations only:
The following are data O, H, L, C of GBPUSD with period D1
Open
1.9984
High
1.9991
Low
1.9874
Close
1.9900
Thus the calculation of the Pivot point becomes:
P = (O + H + L + C) / 4
P = (1.9984 + 1.9991 + 1.9874 + 1.9900) / 4
P = 1.9937
So Sup and Res can be determined as follows:
Soup 1 = (2 x P) - H
Sup 1 = (2 x 1,937-1,9991
Soup 1 = 1.9884
And Soup 2 is:
Soup 2 = P - (H - L)
Add Image
Soup 2 = 1.9937 - (1.9991 - 1.9874)
Soup 2 = 1.9820
Ress 1:
Res 1 = (2 x P) - L
Res 1 = (2 x 1.9937) - 1.9874
Res 1 = 2.0001
Ress 2:
Ress 2 = P + (H - L)
Ress 2 = 1.9937 + (1.9991 - 1.9874)
Ress 2 = 2.0064
With a graph, the display will be as follows:
Ok now, how to use it? Actually we have discussed how the behavior of the price when approaching the point of soup and its rest. But for your convenience, here we summarize the usefulness of the Pivot point:
If the price is close to the Support point, the price probably will turn back up or if the downtrend is too strong, then the price will actually break it and the downtrend will be stronger.
If the price approaches the point of ressistance then the price will again move down away from the resistance point, but if the trend rises too strong (usually due to fundamental issues) then the price will break the ressistance point to then go up further.
The next question is how accurate is the use of support and ressistance points using the pivot point? Hmm ... a difficult question. The key to the accuracy of the pivot point is taking the High, Low and Close points exactly according to the history. Many of the traders modify in such a way that their Pivot no longer uses H, L, C, and O on the previous candle but it could have been some of the previous candles summarized into one. Other traders modify the pivot formula so that it suits their way of trading. So far the Pivot is used quite extensively in daily trading. Accuracy is also pretty good. The difficulty that occurs in the pivot is the usage that often needs to include this and that formula. To simplify you, use Excel to specify the points P, Sup and Res so that you simply enter the numbers H, L, C and O only. One thing to keep in mind, Pivots are powerful enough when prices are not being influenced by news or fundamental fundamentals. In a state of emerging news and price volatility becomes not
Pivot Points
Pivot Points is a calculation method to determine the area of support and ressisatance. He is not an indicator, but is still regarded as a branch of technical analysis because both make decisions based on past projections. Consider the following formula:
Pivot point = (H + L + C + O) / 4
R1 = (2 x P) - L
R2 = P + (H - L)
S1 = (2 x P) - H
S2 = P - (H - L)
The above formula is the formula in the calculation of Support Ressistance by using pivot points. The meanings of O, H, L, C and P are Open, High, Low, Close and Pivot on a candlestick chart respectively. R and S are Ressistance and Support. In contrast to soups and resses using price history, on the Pivot, we can use the point of soup and ress that layered even up to several times. Let's look at the example calculations only:
The following are data O, H, L, C of GBPUSD with period D1
Open
1.9984
High
1.9991
Low
1.9874
Close
1.9900
Thus the calculation of the Pivot point becomes:
P = (O + H + L + C) / 4
P = (1.9984 + 1.9991 + 1.9874 + 1.9900) / 4
P = 1.9937
So Sup and Res can be determined as follows:
Soup 1 = (2 x P) - H
Sup 1 = (2 x 1,937-1,9991
Soup 1 = 1.9884
And Soup 2 is:
Soup 2 = P - (H - L)
Add Image
Soup 2 = 1.9937 - (1.9991 - 1.9874)
Soup 2 = 1.9820
Ress 1:
Res 1 = (2 x P) - L
Res 1 = (2 x 1.9937) - 1.9874
Res 1 = 2.0001
Ress 2:
Ress 2 = P + (H - L)
Ress 2 = 1.9937 + (1.9991 - 1.9874)
Ress 2 = 2.0064
With a graph, the display will be as follows:
Ok now, how to use it? Actually we have discussed how the behavior of the price when approaching the point of soup and its rest. But for your convenience, here we summarize the usefulness of the Pivot point:
If the price is close to the Support point, the price probably will turn back up or if the downtrend is too strong, then the price will actually break it and the downtrend will be stronger.
If the price approaches the point of ressistance then the price will again move down away from the resistance point, but if the trend rises too strong (usually due to fundamental issues) then the price will break the ressistance point to then go up further.
The next question is how accurate is the use of support and ressistance points using the pivot point? Hmm ... a difficult question. The key to the accuracy of the pivot point is taking the High, Low and Close points exactly according to the history. Many of the traders modify in such a way that their Pivot no longer uses H, L, C, and O on the previous candle but it could have been some of the previous candles summarized into one. Other traders modify the pivot formula so that it suits their way of trading. So far the Pivot is used quite extensively in daily trading. Accuracy is also pretty good. The difficulty that occurs in the pivot is the usage that often needs to include this and that formula. To simplify you, use Excel to specify the points P, Sup and Res so that you simply enter the numbers H, L, C and O only. One thing to keep in mind, Pivots are powerful enough when prices are not being influenced by news or fundamental fundamentals. In a state of emerging news and price volatility becomes not
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