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please clarify my doubt in pivot calculator


hello guy,
this is santosh. i have some doubt in pivot calculator so please clarify it sir. i have some knowledge in pivot calculator but i have some doubts. and i will explain my doubts with one example. and i am using meta trader software for trading purpose and in meta trader supply chart in their software.and i will put mouse in that chart then it will displays open, hign, low and close values then i will take that values for finding the pivot points it is correct or not. the example is as follows:

i will take USD/JPY pivot points on 11-10-2005 at 13.30 then USD/JPY open, high, low and close rates are as follows:

open : 117.69
high : 117.74
low : 117.69
close: 117.72 then the pivot points are as follows:

R4 : 117.87
midpoint : 117.84
R3 : 117.82
midpoint : 117.79
R2 : 117.77
midpoint : 117.76
R1 : 117.74
midpoint : 117.73
PP : 117.72
midpoint : 117.71
S1 : 117.69
midpoint : 117.68
S2 : 117.67
midpoint : 117.64
S3 : 117.62
midpoint : 117.59
S4 : 117.57

the above values are the pivot calculator values. in the above values i have some doubts that is what is the midpoint and why r u take 4 resistances and 4 support values.

i will using the above pivot points i will go to USD/JPY buy side because pivot point (PP) is greater than open value other than the pivot point (PP) is below than the open values then i will go to sell side it is correct way or not please tell me sir.

regards,
k.n.v.santosh
Hi Santosh,

It sounds like you need to do a lot more research with pivot points and their effectiveness before you trade real money with them.

The calculator on the web site has the formulae exposed so that you can confirm that they are being calculated correctly by doing it manually. The midpoints, for example, are very simply an average of the price above and below them. In your example, the midpoint between R1 and R2 is (117.74 + 117.77) / 2. Does that make sense?

Your question about trading strategy using pivot points and the USD/JPY can't be answered because I don't trade currencies and have never tested pivot points on currency pairs so I don't know if they work or not.

I would suggest that you take the formulae from the pivot point calculator page and run a simple back test using excel to see if the pivots work with that currency pair and whether or not you can gain an edge with the pivots or with the pivots and a combination of other indicators.

Here is a brief page that I wrote on how to test pivot points:
http://www.deltat1.com/Education/articles/pivots/how_to_back_testing_pivot_points.htm
I hope this helps.

Let me know if you have any other questions.
thanks for giving the information u know or not how to use this in forex trading i mean how to use pivot points in forex trading please tell me
No I have never used pivot points in forex trading so I don't know if they work or not.

I strongly encourage you to do your own testing and not to rely on what others say because only by testing it yourself can you determine the exact probabilities of the strategy that you want to implement.
do u use fibonacci calaculator in forex trading or not because i have also some doubts in fibonacci calculator so please tell me sir.
I don't trade forex so I can't confirm which fib levels work for forex. The calculator works okay. Give me an example of what doesn't work so that I can check it for you.
in fibonacci calculator how to find point a, point b, and point c values please tell me sir.
If you are talking about this calculator:
http://www.deltat1.com/Education/tools/fibonacci/

Then you will input only 2 numbers which are the high and the low.

Then if you want to calculate any other type of fib level you can change the ratio in the calculator and it will "remember" it for you (if you have cookies enabled) then next time that you come back to that page.

Is this what you were asking?