Indicators: DailyPivot Shift
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Indicators: Pivot Lines TimeZone
newdigital, 2014.01.30 11:06
How to Use Forex Yearly Pivot Points to Forecast Euro Targets (based on dailyfx article)
- Pivot points is a popular and easy way that traders can identify potential support and resistance
- Pivot points are based on a mathematical calculation that uses the previous high, low and close of a specified period; weekly, daily, monthly, yearly
- Yearly pivots can forecast maximum and minimum price extremes for the coming year as well as areas where price can change direction.
While most traders are familiar with daily, weekly, and even monthly pivots which fit their type of trading, yearly pivots can also be used to forecast future potential support and resistance areas. Buying at or near a significant area of support and selling at a key area of resistance is the main focus of any trader no matter what the market or the duration traded. Yearly pivots can be monitored for those key trading opportunities.
As you can clearly see in the Euro chart above, forex yearly pivots have been plotted. Notice how the Euro rallied up to the R2 pivot and turned around sharply falling over 600 pips in February. Another significant area that can be easily seen showing the power of
yearly pivots is the triple touch of the R1 yearly pivot at 1.2910. The
third and final touch led to over a 600-pip rally back to the R2 yearly
pivot to close out 2013 up over 4%.
Could forex yearly pivots show traders the next move in the Euro? In the
chart above the 2014 yearly pivots are plotted on the EURUSD chart. The
year is just getting started and the great thing about yearly pivots is
only having to draw them once a year! EURUSD is trapped between the
central pivot at 1.3461 and R1 at 1.4177. As at the time of this
writing, the Euro has not tested either pivot. However, forex traders
may be waiting for a move down to the central pivot (1.3461) for a move
back toward the R1 (1.4177) yearly pivot resistance.
Alternative scenario is for the Euro to make an immediate run for it up
to the R1 level. At R1 pivot resistance, traders may look to take profit
on their longs and/or short the Euro at this level. However, a close
above R1 could lead to a move higher to the R2 pivot (1.4610). Traders
should also consider the possibility of a close below the central pivot
that could lead to a prolonged down push to the S1 (1.3028) level.
Forex traders who scalpers, position or swing traders can make use of
yearly pivots to locate key areas of support and resistance. Look for
future articles on other currency pairs that lay out the yearly pivot
‘landscape’ to help you navigate the forex market.
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DailyPivot Shift:
DailyPivot_Shift indicator differs from the common DailyPivot indicator, as the main levels can be calculated with day start shift.
Pivot Point (PP) is the equilibrium point - a level the price is attracted to throughout the day. Having three values for the previous day: maximum, minimum and close price, 13 levels for smaller timeframes can be calculated: equilibrium point, 6 resistance levels and 6 support levels. This levels are called check points. The check points provide the possibilty of easy determining the direction of the minor trend. Three values are most important - levels of equilibrium point, Resistance1 (RES1.0) and Support1 (SUP1.0). The pauses in the movement, or even a roll-back, are frequently seen during the moving of the price betweeen these values.
In such a way, the DailyPivot indicator:
If the market on the current day opens above the equilibrium point, then it is the signal for opening long positions. If the market opens below the equilibrium point, then the current day is favourable for opening short positions.
Author: Nikolay Kositsin