Forex Pivot Points

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DEFINITION of 'Forex Pivot Points'

A set of indicators developed by floor traders in the commodities markets to determine potential turning points, also known as "pivots". Forex pivot points are calculated to determine levels in which the sentiment of the market could change from "bullish" to "bearish." Currency traders see pivot points as markers of support and resistance.

Forex pivot points are calculated as the average of the high, low and close from the previous trading session:

Forex Pivot Point = (High + Low + Close) / 3


BREAKING DOWN 'Forex Pivot Points'

Because pivot points are thought to work well in very liquid markets, the spot forex market may be the perfect place to use them. Day traders use the calculated pivot points to determine levels of entry, stops and profit taking by trying to determine where the majority of other traders may be doing the same. Forex pivot point calculators are available free of charge across the internet through retail forex brokers and third-party websites.

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RELATED FAQS
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    The best technical indicators to complement a forex pivot point strategy are momentum indicators, moving averages and trendlines. ... Read Full Answer >>
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    There are a wide variety of markets in which one can invest money. The main markets are stocks (equity), bonds, forex, derivatives ... Read Full Answer >>
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    In economics, utility function is an important concept that measures preferences over a set of goods and services. Utility ... Read Full Answer >>
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    Double exponential moving averages (DEMAS) are commonly used in technical analysis like any other moving average indicator ... Read Full Answer >>
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