Why do stock market and commodity traders use Pivot Point Calculator?
Analysis: What is a Pivot Point anyway? Is a Pivot point calculator of any real use? As a confirmed long-term investor in the stock market, why should I bother about what forex and commodity traders do? Lots of questions! Hopefully, I’ll provide some reasonably cogent answers – in spite of my avowed aversion towards short-term trading. So, first things first. (We’ll stick to the stock market since this blog is not about forex and commodities.) A Pivot Point (P) is a technical analysis indicator used by traders to predict future direction of movement of a stock price (or an index level). It is a price level of a stock (or an index level) that is calculated by adding the previous trading day’s high (H), low (L) and close (C) prices (or levels) and dividing the total by 3. In other words: Pivot Point (P) = (H + L + C)/3. Some times, a variation of this simple formula includes the previous day’s or current day’s open (O) price (or level). In which case, the calculation becomes: Pivot Point
