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Chapter 15, Part III. Other ways of Pivots calculation. Page 2

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 21, 2013.

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  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Let’s start from so called Woodie Pivot Points:



    WOODIE PIVOTS

    R2 = PP+H-L;

    R1 = 2xPP-L;

    PP = (H+L+2C)/4

    or sometimes it calculates as


    (Previous H+ previous L + 2 Current Open)/4

    S1 = 2xPP-H

    S2 = PP-H+L

    As you can see the major difference is that Woodie pivots give more weight to close price than to others prices – as high, as low. We know that classical pivots calculate based on the previous trading session H, L and C prices. But Woodie pivot points could use Open price of current trading session instead of close price of previous trading session. Although on Forex they are quite the same – on other markets they could be significantly different. The major reason for dominating of close price is that it’s extremely important in technical analysis and serves for estimation of numerous crucial moments – for instance, close above/below some support/resistance, MA etc. That’s why close price so important in technical analysis, and that’s why Woodie Pivots give it greater weight in calculation.
     
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