Turning points

For years, traders used the so-called turning point for determining the critical level of support and resistance. Turning points - a very popular method in online Forex trading currency, which can be very useful for determining the optimum point for entry and exit from it.

By definition, the turning point - a point of rotation. To calculate the turning points are used the maximum and minimum prices of the previous period. Data observed taken from the daily charts, but the turning point could well be visible using the time schedule. If the calculation of the value of the turning points is based on information in a shorter period, thereby decreasing the accuracy and relevance of its value.

The formula for calculating the turning point is the following:

The central point of rotation = highest price + lowest price + price at closing / 3

With the help of a turning point can calculate the level of support and resistance.

The first level of support and resistance:

First resistance = 2 * turning point - the lowest price

First support = 2 * turning point - the highest price

The second level of support and resistance is calculated as follows:

The second turning point of resistance = + first level of resistance - the first level of support

The second level of support = turning point - the first level of resistance - the first level of support