How to Calculate Pivot Point

Pivot Point is a way of calculation to determine the line Support (lower limit) and Resistance (upper limit). Pivot is the result of the Division of the summation point of opening (open), the highest price (high), lowest price (low), and the closing price (close) deals the previous day. How to calculate pivot point, let's read below.

PIVOT POINT = ( OPEN + HIGH + LOW + CLOSE ) / 4

Support is the bottom line on the day of the transaction which is expected if the rate reaches the line of support, then the prices will again turn upwards. But if the trend of strong declines, the price trend will penetrate the first line support (S.1) towards the next support line.

Support 1 = (2 x Pivot Point) - High
Support 2 = Pivot Point - (High - Low)

Resistance is the top line on the day of the transaction which is expected when the price has reached the lines of resistance, then the prices will again turned down. But if the trend of rising prices, the increasing trend will penetrate the line resistance (R.1) towards the next Resistance line (R.2).

Resistance 1 = (2 x Pivot Point) - Low
Resistance 2 = Pivot Point + (High - Low)

To get the number of Open, High, Low, and Close please press F2 on Meta Trader-> Daily Time.

In using this strategy, traders are expected to pay close attention to the margin used. For example for buying 1 Volume/1 Lots we need USD 100, USD 120, or perhaps USD 150. Because each transaction (GBP/USD, EUR/USD, USD/JPY, USD/CHF) require different margins.

Note that use leverage 1: 1, 1: 100, 1: 200, 1: 400, 1: 500.
The greater the leverage, the greater will be the risk that will be accepted (in case of loss), and will be even greater profit to be gained (if profit). Leverage is very influential to the power margin of a trader.

You can calculate pivot, support and resistance point automatically at http://www.pivotpointcalculator.com