What are Forex swivel points?
Forex swivel points are points or around which foreign exchange or forex prices are expected to turn or change the direction, as well as may become strength. These points are used as front indicators of price movements, which means that they are considered somewhat predictive to the future pricing course, whether up or down. For example, trading in prices above the swivel point at a certain period indicates the bull, the expectation that prices will be higher in the following periods. Trading in prices below the point of rotation at a certain period indicates a bear and the expectation that prices will move down in the following periods.
The use of forex swivel points has been created among those who practice technical analysis. The main prerequisite for this analysis is that all available information is incorporated into the market price of a widely traded liquid asset. Technical analysis is popular among banks and other authorized Forex traders who primarily trade, or exchange, currency pairs such as JE US dollar and Japanese only, on the interbank market. Forex swivel points are calculated by averaging high, low and final prices for a specific business period. In the case of the Forex market, this is generally one day, although the use of shorter, intraday and longer -term periods is not uncommon.
Three levels of support and resistance are usually calculated in addition to forex swivel points to further support decision -making. The levels of primary support are considered to be floors under which prices are not expected. Price distribution and moving continue to be a change in trend or moving to a lower business range and require recalculation of rotating points, support levels and resistance. On the contrary, prices moving above the level of resistance are taken over to indicate a change in trend or moving up to a higher Ding route.
The primary support level is calculated by deducting the minimum of the previous business period from the pointPivot and deducting this difference from the point of rotation. On the contrary, the level of primary resistance is obtained by deducting the price of the point price from the high price of the previous period and by adding it to the point of the beer. The secondary level of support and resistance is wider. Secondary resistance is calculated by adding the difference between high and low prices to the beer point. Secondary support is calculated by deducting this difference from the rotary point.
Finally, the third and even wider set of support and level of resistance is calculated. Tertiary resistance is calculated by adding twice the difference between the previous high and low rotation points. Tertiary support is calculated by deducting twice the difference from forex swivel points.