How To Use A Pivot Point Calculator

How To Use A Pivot Point Calculator

Pivot point calculators are one of many tools that can render binary options trading more profitable. This calculator will offer up important information based upon high, low, and average asset prices for specific periods. This data can be used to identify pivot point regions, and can certainly point out both price trends and levels of support and resistance. New traders are encouraged to learn how to use this tool soon after the decision to become a trader is made.

The calculator itself will do much of the work for you, as it will estimate possible pivot points. The settings of S1-3, central, and R1-3 are most commonly used for these estimations. There should be no cost to access a pivot point calculator, as they are usually included in charting packages. Those who choose to use MetaTrader 4 will receive this tool, and when used within this platform, the system will automatically compute and mark the points for you.

If you plan to use this calculator as part of a strategy, remember that it should be used along with additional indicators. When used alone, it will not produce an overly impressive win rate. Also, several time periods should be studied. Entry points may not last long and these can easily be influenced by price trends. There really is no limit as to which instruments can be selected when using this tool as part of a strategy, but be sure that the selected instrument does indeed pair well with the indicated upcoming movement.

Pivot points work well to show a range for upcoming movement. They are even more powerful when Fibonacci is applied. Since it will be possible to spot both breakouts and reversals in advance, the Boundary instrument (both in and out) can be used. Short-term price corrections may also be identified, thus providing opportunities to utilize shorter expiry times of as small as sixty seconds up to five minutes.

Keep in mind that when the asset price is within pivot point levels, complete reversals are possible. However, before making this determination, it will be necessary to monitor price movement for an period of time. Some type of trend will need to be in place before a reversal can even be considered as a viable possibility. If no trend is detected, you can then check to see if the price is flat, or range-bound.

The estimated price levels will show some areas of support and resistance. Consider also analyzing the opening price and price action at market opening. If the price for the day opens at a level that is higher than the central pivot, the market may be bullish. If the price opens higher than the secondary pivot point, the market may be bullish long-term, but can be viewed as being bearish for the day. Scenarios such as these can provide helpful information early on in the day.

In most cases, the pivot point calculator works best at showing short-term movements and therefore trades made using it should also be short-term. Do not use this tool as your sole means of forecasting price movement. If you do, you’re likely to be disappointed. When used along with other forms of technical analysis, it will provide plenty of insight into how the markets are moving and may move in the future. This is information that all binary options traders must have before entering into contracts.

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