PIVOT POINT INDICATOR

Cheat Sheet
PIVOT POINT INDICATOR
WHAT IS A PIVOT POINT?
• Pivot points are calculated based on the high, low, and closing price of the previous session.

• Includes support and resistance levels that are based on the pivot point calculation.

• Because all lines are static, it can help traders plan their day in advance.

• One of the easiest technical indicators.

HOW DOES IT WORK?

• Pivot point lines remain at the same level throughout the day.

• Used to predict support and resistance levels in the upcoming trading session.

• These support and resistance levels can be used as profit-targets and stop-loss levels.

FORMULAS
(OUR PIVOT POINT CALCULATOR ON PAGE 4 WILL DO THIS FOR YOU!)

PIVOT POINT = (HIGH + LOW + CLOSE) ÷ 3

RANGE = HIGH − LOW

R 1 = ( P I VO T × 2) − L O W
R 2 = P I VO T + R A N G E
R 3 = H I G H + 2 × ( P I VO T − L O W )

S 1 = ( P I VO T × 2 ) − H I G H
S 2 = P I VO T − R A N G E
S 3 = L O W − 2 × ( H I G H − P I VO T )

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 USING THE PIVOT POINT INDICATOR
1. USED FOR TAKE-PROFIT TARGETS TO SCALE
OUT OF PROFITABLE POSITIONS
• In the example below, you can see that profit is taken when R lines are hit.

2. USED FOR BREAK-OUT ENTRIES

• Often old resistance becomes support, and vice-versa.

• The pivot point indicator can help with with-trend entries when lines get breached and retested.

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The information provided within this PDF is for educational purposes only.
3. USED FOR ENTRIES FOR COUNTER-TREND AND REVERSAL
• In the example below, an R line is hit twice. The double top indicated a trend-reversal.

4. USED FOR STOP-LOSS PLACEMENT

• To manage risk, you could put your stop-loss on or near one of the pivot point lines.

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 5. USED AS A FILTER TO KEEP OUT OF LOW RISK/REWARD TRADES
• Use key-levels of support and resistance to stay out of certain trades to increase your win-loss ratio.

• If your profit-target is on the other side of an R or S line, price could stall before profit-target is hit.

• For example, in the chart below, if your profit-target is above R3, it might be better to stay out.

FREE PIVOT POINT CALCULATOR

Not sure how to find pivot points on your chart?
Use the free Pivot Point Calculator on ForexSignals.com to find
the significant support and resistance levels immediately!

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The information provided within this PDF is for educational purposes only.