We saw one of the last items pivot point, or a way to measure objectively the current price based on the behavior of the same price than before. We also calculated the pivot point and now let's see how we can use in our trading.

If the level of the market indicates that one is above the PP, then the market itself can be considered bullish, or bull. If the market is below the PP, then we can say that the market is bearish. With the pivot point is also possible to calculate the value of support and resistance. These levels are calculated as follows:

Support 1 (S1) = (2 * PP) - H Resistance 1 (R1) = (2 *

Both the support that the resistance can therefore be used as a way to calculate the operation and do our trading. The pivot points are in fact used by many traders, partly because trying to predict the levels of support and resistance using a mathematical formula, it is something objective, though not to be trusted blindly in the levels found, which is why we see an alternative method.

Just calculate the pivot point in the same way, while the levels of support and resistance have a different calculation. Consider in fact the maximum and minimum of the previous session, or yesterday, and draw those levels in the current session, or today. The same we do with the maximum and minimum of two previous sessions, ie two days ago.

The psychology behind this approach is simple. We know that for some reason the market has a change of trend at these levels. The important thing with this approach is that different levels of support and resistance are measured objectively.