Many traders and investors use the concept of support and resistance in Forex trading, in order to make profits in the market for currencies. Support lines and resistance lines typically act as barriers, which prevent the prices of currency pairs from moving furthermore into a certain direction. Forex traders use lines of support and lines of resistance in order to spot additional, potentially profitable opportunities in the market for currencies.
Pivot points are very popular and are used by all kinds of Forex traders and investors, including the ones at the very top. They are one of the most popular ways to determine both support lines and resistance lines, as well as market turning points.
In order to calculate pivot points quickly, easily and accurately, you will need a pivot point calculator. They can seem perhaps a little daunting at first, especially to beginners, but after some practice they can be very easy to use. All you have to do with these sorts of calculators, is:
1) Input the high price of the currency pair in question.
2) Input the low price of the same currency pair.
3) Input the closing price of the same currency pair.
After inputting the high, low and close of the currency pair that you are looking at, with a push of a button you will be able to have the pivot point of the same currency pair calculated for you within an instant.
Pivot point calculators are free and there are many available on the internet. Some of these types of calculators will allow you to calculate the pivot points of multiple currency pairs simultaneously, which is great if you trade multiple pairs of currencies.
They might take a little bit of getting used to, but if you apply them to your Forex trading effectively, you could find these types of calculators to be beneficial. If you use more short-term Forex trading strategies (for example if you are a swing trader), you will definitely want to consider using a pivot point calculator, as you will want to take the concept of support and resistance into consideration even more than those who use more long-term trading strategies; these kinds of calculators are great for determining lines of support and lines of resistance as mentioned already.
In conclusion, pivot point calculators in Forex trading can be effective if used properly. If you use a short-term currency trading strategy, you will most likely want to take take advantage of one of these kinds of calculators, especially if you are a swing trader. These sorts of calculators will allow you to calculate pivot points which can be used to form support and resistance lines, allowing you to spot potentially profitable opportunities in the market for currencies. Although support and resistance lines don’t always allow Forex traders to profit, they can allow some traders and investors to make a lot of money. Forex trading is all about trial-and-error learning but with some practice beforehand, a pivot point calculator could prove to be a powerful tool for you, despite the fact that these types of tools are essentially very simple.