Pivot Points

Fibonacci Pivot Points

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Summary: In this article we describe the use and calculation of Fibonacci Pivot Points, a little known variant compared with traditional pivot points. The novelty about this tool is that it interestingly combines the pivots and Fibonacci sequence to determine support and resistance levels where there is high probability that the market made ​​major moves.

The pivot points in its different variations can be used in two ways: to display the main trend in the market that we are analyzing or to display price levels in which we can open and close a position. To identify the direction, if the price level of the pivot point is crossed in an upward motion, then we can say that the market is bullish, but if the break occurs in a downward movement, then the market is bearish. Generally, if prices remain above the pivot point then the upward trend will continue until an event cause a reverse in the price movement and when the price remains below this level then the market will continue its downward direction until something happens that force a change in the current trend.

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Trades against the double zero levels

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One of the most overlooked aspects in trading although it is one of the most lucrative if properly understood, is the market structure. Having a deep understanding of market dynamics and micro-structure gives the trader a huge advantage and is one of the best tactics to profit with changes in the price of the currencies at intraday level. This is key for traders who prefer short-term trades.

In the Forex trading thist is crucial, because the main influence on the price movement in the intraday market is the order flow. Since in most cases, individual traders do not have access to order flow data, day traders seeking to profit from short term fluctuations have to learn to identify price areas where large orders flows should occur so that they can anticipate these orders flows in the right moment. This trading strategy with double zero levels is extremely efficient for intraday traders because it allows them to keep pace with the market makers.

When we trade at intraday level, we can not look for rebounds in all levels of support and resistance and expect winning trades in all cases. The key to a profitable intraday trade is that the trader should be selective and just open positions at the levels where there is a greater probability that a reaction will occur. For example, opening positions in psychologically important price levels, like round numbers or double zeros, is a good way to identify such opportunities.

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Camarilla Equation Indicator for Metatrader

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Indicator parameters Alerts= false GMTshiftSun = 1.0 GMTshift = 0.0 pivot= true StandardPivots = true ListStandardPivots = true It is an indicator designed to show daily Camarilla pivot points on any Metatrader chart. It is based on the famous Camarilla equation, an alternative method to calculate Pivot Points, which lets you determine a central pivot point (PP), four levels of resistance (R1, R2, R3 and R4) … Read more

Pivot Points in Trading

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The pivot points are a type of market analysis tool used by many investors to trade regularly in any financial market including Forex. They are used in the same way as support and resistance to determine levels at which the price is likely to bounce or continue the current trend. In this article we are going to show the different types of pivot points that exist, their calculation and some suggestions for their use.

The Camarilla Equation – Formula and Definition

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The Camarilla Equation is an interesting market analysis tool similar to the pivot points but is little known among the majority of traders. For this reason, in the following article, we will explain in detail about the fundamentals and use of this tool.

Camarilla equation was discovered by the trader Nick Stott in 1999, and until recently it was a secret formula to determine price levels similar to the pivot points, but according to many traders, these levels are more effective. It assumes that the market has the tendency to revert to a point of balance that might be called midpoint, pivot, and so on. Based on this idea and using the formula of the equation is possible to calculate 8 relevant price levels in which is likely to produce changes in the market trend.

As mentioned at the beginning of the preceding paragraph, the Camarilla equation was secret until it was somehow released. The equations for calculating the 8 levels are:

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