Pivot 2.6638, R1 2.7037, and S1 2.6413 , where R1 = Resistance and S1 = Support.
Looking at these values and dropping down to the shorter term daily or 8 hour chart, you can start to see how these values apply to the chart pricing. The prices will not hit exactly the key points but if you have trouble defining support and resistance levels, give pivots a try.At the bottom of this page you can input any values from any pair. It works well on monthly candles, weekly candles, daily candles and intra-day candles. The basic premise is to expect the price to be bullish above the pivot to the resistance levels above the pivot. The other side of the equation is to be bearish below the pivot and use the values below the pivot as potential support levels.
As those who have followed the blog know, I like to buy at support levels and sell at resistance levels. As i look at the GBP/NZD, I generally use my own support and resistance levels but looking at the pivot points they match very close to some of the key levels I am watching. It would have been great to sell of the 2.7037 level and a close below the 2.6638 level could be an indication of bearish sentiment to the next level.
The key with these levels, in my opinion, is use closed or completed time frames for the values to start the calculation and then remember to control your risk by selling off of resistance levels and buying up support levels. Add some of your own discretion and some fibs and I think you have a decent trading plan.
4 comments:
Thank you for this, Blake. I have downloaded it as I think it will help the discretion of support and resistance. Although my system is giving a sell signal, I am going to wait until it breaks through S0.5. It may be a little more conservative to wait for the break, but it seems to have a very strong support here - and the account in which I trade this pair doesn't have much left in it.
Blake, Thanks for the pivot points. My resistance was close to the calculated value. The long wicks are still causing my problems. I thought 1.5 * ATR plus 2* spread was safe. It is on most pairs but the GBP/NZD is wild.
Thanks, Blake, for sharing the widget.
Question: From time to time, I've used the spreadsheet based calculator Eric posted as a Technical Commentary item roughly a year and a half ago. Do you know if this is based on the same calculations? (I've been thinking about suggesting it be re-posted for newer site members, but this will probably satisfy the idea.)
Answered my own question: I compared the results calculated from the widget with a calculation using Eric's spreadsheet and they are the same. Only difference is that Eric's spreadsheet only gives the Pivot Point plus R1, R2 and S1, S2.
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