Pivot Point Standard Indicator: A Must-Have Tool for Binary Options Traders
Last updated
Last updated
Pivot Point Standard Indicator is a widely used technical analysis tool that helps traders determine potential levels of support and resistance in the market. It is a simple yet effective indicator that can be used by traders of all levels, including those who trade binary options. In this article, we will explain what Pivot Point Standard Indicator is and how it can be useful for binary options traders.
Pivot Point Standard Indicator is a mathematical calculation that is used to determine the overall trend of the market. It is based on the previous day's high, low, and closing price, and it provides traders with potential levels of support and resistance. The indicator is calculated using the following formula:
Pivot Point (PP) = (High + Low + Close) / 3
From the Pivot Point, traders can calculate the first level of support (S1) and resistance (R1) by using the following formulas:
S1 = (2 x PP) - High
R1 = (2 x PP) - Low
Traders can also calculate additional levels of support and resistance by using the following formulas:
S2 = PP - (High - Low)
R2 = PP + (High - Low)
S3 = Low - 2 x (High - PP)
R3 = High + 2 x (PP - Low)
Pivot Point Standard Indicator can be useful for binary options traders in several ways. Here are a few examples:
Identifying potential levels of support and resistance: Pivot Point Standard Indicator can help binary options traders identify potential levels of support and resistance in the market. These levels can be used to place entry and exit points, as well as stop-loss orders.
Determining the overall trend of the market: By calculating the Pivot Point and other levels of support and resistance, binary options traders can determine the overall trend of the market. This can help traders decide whether to place a call or put option.
Setting price targets: Pivot Point Standard Indicator can also be used to set price targets. Traders can use the levels of support and resistance to determine where the price is likely to go and set their price targets accordingly.
Confirming other indicators: Pivot Point Standard Indicator can also be used to confirm other indicators. For example, if a trader is using a trend indicator and the Pivot Point Standard Indicator shows a level of support or resistance in the opposite direction, the trader may decide to wait for confirmation from the Pivot Point Standard Indicator before making a trade.
In conclusion, Pivot Point Standard Indicator is a must-have tool for binary options traders. It can help traders identify potential levels of support and resistance, determine the overall trend of the market, set price targets, and confirm other indicators. By using this simple yet effective indicator, binary options traders can improve their chances of making profitable trades.
