Using a Pivot Calculator: Key Terms to Remember

Jul 12 • Forex Calculator • 1375 Views • Comments Off on Using a Pivot Calculator: Key Terms to Remember

A pivot calculator is among the simplest forex tools to use. After all, it would only be necessary for one to gather several values from the trade data and afterwards place such information on the aforementioned computational tool. Indeed, coming up with the pivot point in an accurate and reliable manner is as easy as a few clicks of the mouse. Those just beginning to appreciate the various facets of forex trading however, might be perplexed upon seeing such a calculator firsthand due to the presence of unfamiliar terms. Simply put, it is imperative for any trader to learn about such words.

Many would surely notice that a pivot calculator often requires three values to be inputted so as to provide the pivot point. Such values are the high, the low, and the close prices: specific numbers that are determined by evaluating an entire 24-hour trading cycle. It should be emphasized however, that there are instances in which a calculator might require a fourth value: the open price. A computational tool that requires the open price boasts greater potential in predicting upcoming trends. Regardless of the type of calculator that one uses though, one would see two other terms.

One of such terms common among all pivot calculator applications is support. Simply put, anyone would realize upon glancing at a few forex graphs that trends generally follow a sinusoidal pattern. At the lowest portion of each wave, there always exists a single point referred to as the support. In the simplest sense, the support represents the end of a considerable decline in value. Of course, the aforesaid point also symbolizes the beginning of a potential upswing. With these in mind, it becomes clear as to why expert traders associate the support with opportunities.

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Just like the previously discussed term, the word resistance is also seen in all pivot calculator programs. While novice traders might assume that resistance represents a complex forex concept, the term is actually rather basic. As pointed out, forex graphs tend to have a sinusoidal shape: it is for this very reason that a term is also used to pertain to the point in which the increase in value ends and a noticeable decrease begins. Essentially, resistance is merely the opposite of support. Nonetheless, traders still need to take note of resistance so as not to be caught off-guard by declines.

As made clear, there are several terms that every trader should know before attempting to use a pivot point calculator. To reiterate, such people must become capable of identifying the different parts of a 24-hour trading cycle, namely the close, the open, the high, and the low. As also mentioned, it is vital for any aspiring trader to be aware of the significance of support: one of the main values computed for by the aforementioned tool. Of course, it is also imperative for such individuals to remember the meaning of resistance. All in all, using a pivot calculator requires one to have a certain level of forex vocabulary.

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