Pivot Points
A pin dot is a cost grade of significance inward technical analysis of a fiscal marketplace seat that is used yesteryear traders every bit a predictive indicator of marketplace seat movement. Influenza A virus subtype H5N1 pin dot is calculated every bit an average of pregnant prices (high, low, close) from the functioning of a marketplace seat inward the prior trading period. If the marketplace seat inward the next menses trades to a higher house the pin dot it is ordinarily evaluated every bit a bullish sentiment, whereas trading below the pin dot is seen every bit bearish.
Monthly pin dot nautical chart of the Dow Jones Industrials Average for the foremost 8 months of 2009, showing sets of foremost in addition to bit levels of resistance (green) in addition to back upwardly (red). The pin dot levels are highlighted inward yellow. Trading below the pin point, especially at the outset of a trading menses sets a bearish marketplace seat persuasion in addition to oft results inward farther cost decline, piece trading to a higher house it, bullish cost activity may proceed for some time.
It is customary to calculate additional levels of back upwardly in addition to resistance, below in addition to to a higher house the pin point, respectively, yesteryear subtracting or adding cost differentials calculated from previous trading ranges of the market.
A pin dot in addition to the associated back upwardly in addition to resistance levels are oft turning points for the management of cost drive inward a market. In an up-trending market, the pin dot in addition to the resistance levels may correspond a ceiling grade inward cost to a higher house which the uptrend is no longer sustainable in addition to a reversal may occur. In a declining market, a pin dot in addition to the back upwardly levels may correspond a depression cost grade of stability or a resistance to farther decline.
* Monthly pin dot nautical chart of the Dow Jones Industrials Average for the foremost 8 months of 2009, showing sets of foremost in addition to bit levels of resistance (green) in addition to back upwardly (red). The pin dot levels are highlighted inward yellow. Trading below the pin point, especially at the outset of a trading menses sets a bearish marketplace seat persuasion in addition to oft results inward farther cost decline, piece trading to a higher house it, bullish cost activity may proceed for some time.
Calculation
Several methods be for calculating the pin dot (P) of a market. Most commonly, it is the arithmetics average of the high (H), depression (L), in addition to closing (C) prices of the marketplace seat inward the prior trading period:
P = (H + L + C) / 3.
Sometimes, the average also includes the previous period's or the electrical current period's opening cost (O):
P = (O + H + L + C) / 4.
In other cases, traders similar to emphasize the closing price, P = (H + L + C + C) / 4, or the electrical current periods opening price, P = (H + L + O + O) / 4.
Support in addition to resistance levels
Price back upwardly in addition to resistance levels are telephone substitution trading tools inward whatever market. Their roles may hold upwardly interchangeable, depending on whether the cost grade is approached inward an up-trending or a down-trending market. These cost levels may hold upwardly derived from many marketplace seat assumptions in addition to conventions. In pin dot analysis, several levels, ordinarily three, are commonly recognized below in addition to to a higher house the pin point. These are calculated from the hit of cost drive inward the previous trading period, added to the pin dot for resistances in addition to KJKJKJsubtracted from it for back upwardly levels.
The foremost in addition to almost pregnant grade of back upwardly (S1) in addition to resistance (R1) is obtained yesteryear recognition of the upper in addition to the lower halves of the prior trading range, defined yesteryear the trading to a higher house the pin dot (H − P), in addition to below it (P − L). The foremost resistance on the up-side of the marketplace seat is given yesteryear the lower width of prior trading added to the pin dot cost in addition to the foremost back upwardly on the down-side is the width of the upper work of the prior trading hit below the pin point.
R1 = P + (P − L) = 2×P − L
S1 = P − (H − P) = 2×P − H
Thus, these levels may just hold upwardly calculated yesteryear subtracting the previous depression (L) in addition to high (H) price, respectively, from twice the pin dot value:[1]
The bit gear upwardly of resistance (R2) in addition to back upwardly (S2) levels are to a higher house in addition to below, respectively, the foremost set. They are just determined from the total width of the prior trading hit (H − L), added to in addition to subtracted from the pin point, respectively:
R2 = P + (H − L)
S2 = P − (H − L)
Commonly a tertiary gear upwardly is also calculated, 1 time to a greater extent than representing some other higher resistance grade (R3) in addition to a all the same lower back upwardly grade (S3). The method of the bit gear upwardly is continued yesteryear doubling the hit added in addition to subtracted from the pin point:
R3 = H + 2×(P − L)
S3 = L − 2×(H − P)
This concept is sometimes, albeit rarely, extended to a 4th gear upwardly inward which the tripled value of the trading hit is used inward the calculation.
Qualitatively, the bit in addition to higher back upwardly in addition to resistance levels are ever located symmetrically to a greater extent than or less the pin point, whereas this is non the instance for the foremost levels, unless the pin dot happens to split the prior trading hit precisely inward half.
Trading tool
The pin dot itself represents a grade of highest resistance or support, depending on the overall marketplace seat condition. If the marketplace seat is directionless (undecided), prices volition oft fluctuate greatly to a greater extent than or less this grade until a cost breakout develops. Trading to a higher house or below the pin dot indicates the overall marketplace seat sentiment. It is a leading indicator providing advanced signaling of potentially novel marketplace seat highs or lows inside a given fourth dimension frame.
The back upwardly in addition to resistance levels calculated from the pin dot in addition to the previous marketplace seat width may hold upwardly used every bit give-up the ghost points of trades, but are rarely used every bit entry signals. For example, if the marketplace seat is up-trending in addition to breaks through the pin point, the foremost resistance grade is oft a proficient target to closed a position, every bit the probability of resistance in addition to reversal increases greatly.
*5-day pin dot nautical chart of the SPDR Gold Trust (GLD) for intra-day trading inward Oct 2009
Many traders recognize the half-way levels betwixt whatever of these levels every bit additional, but weaker resistance or back upwardly areas. The half-way (middle) dot betwixt the pin dot in addition to R1 is designated M+, betwixt R1 in addition to R2 is M++, in addition to below the pin dot the middle points are labeled every bit M− in addition to M−−. In the 5-day intra-day nautical chart of the SPDR Gold Trust (above) the middle points tin sack clearly hold upwardly identified every bit back upwardly inward days 1, 3, in addition to 4, in addition to every bit resistance inward days ii in addition to 3.
source: http://en.wikipedia.org/wiki/Pivot_points
Best Regards,
^^_Lord_Ice_^^
Monthly pin dot nautical chart of the Dow Jones Industrials Average for the foremost 8 months of 2009, showing sets of foremost in addition to bit levels of resistance (green) in addition to back upwardly (red). The pin dot levels are highlighted inward yellow. Trading below the pin point, especially at the outset of a trading menses sets a bearish marketplace seat persuasion in addition to oft results inward farther cost decline, piece trading to a higher house it, bullish cost activity may proceed for some time.
It is customary to calculate additional levels of back upwardly in addition to resistance, below in addition to to a higher house the pin point, respectively, yesteryear subtracting or adding cost differentials calculated from previous trading ranges of the market.
A pin dot in addition to the associated back upwardly in addition to resistance levels are oft turning points for the management of cost drive inward a market. In an up-trending market, the pin dot in addition to the resistance levels may correspond a ceiling grade inward cost to a higher house which the uptrend is no longer sustainable in addition to a reversal may occur. In a declining market, a pin dot in addition to the back upwardly levels may correspond a depression cost grade of stability or a resistance to farther decline.
* Monthly pin dot nautical chart of the Dow Jones Industrials Average for the foremost 8 months of 2009, showing sets of foremost in addition to bit levels of resistance (green) in addition to back upwardly (red). The pin dot levels are highlighted inward yellow. Trading below the pin point, especially at the outset of a trading menses sets a bearish marketplace seat persuasion in addition to oft results inward farther cost decline, piece trading to a higher house it, bullish cost activity may proceed for some time.
Calculation
Several methods be for calculating the pin dot (P) of a market. Most commonly, it is the arithmetics average of the high (H), depression (L), in addition to closing (C) prices of the marketplace seat inward the prior trading period:
P = (H + L + C) / 3.
Sometimes, the average also includes the previous period's or the electrical current period's opening cost (O):
P = (O + H + L + C) / 4.
In other cases, traders similar to emphasize the closing price, P = (H + L + C + C) / 4, or the electrical current periods opening price, P = (H + L + O + O) / 4.
Support in addition to resistance levels
Price back upwardly in addition to resistance levels are telephone substitution trading tools inward whatever market. Their roles may hold upwardly interchangeable, depending on whether the cost grade is approached inward an up-trending or a down-trending market. These cost levels may hold upwardly derived from many marketplace seat assumptions in addition to conventions. In pin dot analysis, several levels, ordinarily three, are commonly recognized below in addition to to a higher house the pin point. These are calculated from the hit of cost drive inward the previous trading period, added to the pin dot for resistances in addition to KJKJKJsubtracted from it for back upwardly levels.
The foremost in addition to almost pregnant grade of back upwardly (S1) in addition to resistance (R1) is obtained yesteryear recognition of the upper in addition to the lower halves of the prior trading range, defined yesteryear the trading to a higher house the pin dot (H − P), in addition to below it (P − L). The foremost resistance on the up-side of the marketplace seat is given yesteryear the lower width of prior trading added to the pin dot cost in addition to the foremost back upwardly on the down-side is the width of the upper work of the prior trading hit below the pin point.
R1 = P + (P − L) = 2×P − L
S1 = P − (H − P) = 2×P − H
Thus, these levels may just hold upwardly calculated yesteryear subtracting the previous depression (L) in addition to high (H) price, respectively, from twice the pin dot value:[1]
The bit gear upwardly of resistance (R2) in addition to back upwardly (S2) levels are to a higher house in addition to below, respectively, the foremost set. They are just determined from the total width of the prior trading hit (H − L), added to in addition to subtracted from the pin point, respectively:
R2 = P + (H − L)
S2 = P − (H − L)
Commonly a tertiary gear upwardly is also calculated, 1 time to a greater extent than representing some other higher resistance grade (R3) in addition to a all the same lower back upwardly grade (S3). The method of the bit gear upwardly is continued yesteryear doubling the hit added in addition to subtracted from the pin point:
R3 = H + 2×(P − L)
S3 = L − 2×(H − P)
This concept is sometimes, albeit rarely, extended to a 4th gear upwardly inward which the tripled value of the trading hit is used inward the calculation.
Qualitatively, the bit in addition to higher back upwardly in addition to resistance levels are ever located symmetrically to a greater extent than or less the pin point, whereas this is non the instance for the foremost levels, unless the pin dot happens to split the prior trading hit precisely inward half.
Trading tool
The pin dot itself represents a grade of highest resistance or support, depending on the overall marketplace seat condition. If the marketplace seat is directionless (undecided), prices volition oft fluctuate greatly to a greater extent than or less this grade until a cost breakout develops. Trading to a higher house or below the pin dot indicates the overall marketplace seat sentiment. It is a leading indicator providing advanced signaling of potentially novel marketplace seat highs or lows inside a given fourth dimension frame.
The back upwardly in addition to resistance levels calculated from the pin dot in addition to the previous marketplace seat width may hold upwardly used every bit give-up the ghost points of trades, but are rarely used every bit entry signals. For example, if the marketplace seat is up-trending in addition to breaks through the pin point, the foremost resistance grade is oft a proficient target to closed a position, every bit the probability of resistance in addition to reversal increases greatly.
*5-day pin dot nautical chart of the SPDR Gold Trust (GLD) for intra-day trading inward Oct 2009
Many traders recognize the half-way levels betwixt whatever of these levels every bit additional, but weaker resistance or back upwardly areas. The half-way (middle) dot betwixt the pin dot in addition to R1 is designated M+, betwixt R1 in addition to R2 is M++, in addition to below the pin dot the middle points are labeled every bit M− in addition to M−−. In the 5-day intra-day nautical chart of the SPDR Gold Trust (above) the middle points tin sack clearly hold upwardly identified every bit back upwardly inward days 1, 3, in addition to 4, in addition to every bit resistance inward days ii in addition to 3.
source: http://en.wikipedia.org/wiki/Pivot_points
Best Regards,
^^_Lord_Ice_^^
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