What Pivot Calculation Does Real Tick Reference

The Real Tick Reference uses a specific pivot calculation method to identify key support and resistance levels in trading. This guide explains the pivot calculation used by Real Tick and how traders can apply it in their analysis.

What is Real Tick Reference?

Real Tick Reference is a trading platform that provides real-time market data and analysis tools. One of its key features is the use of pivot calculations to identify potential support and resistance levels in financial instruments.

Pivot points are calculated based on the previous day's price action, specifically using the high, low, and close prices. These levels are used by traders to anticipate potential price movements and make informed trading decisions.

Pivot Calculation Method

The pivot calculation used by Real Tick Reference follows the standard pivot point formula:

Pivot Point (PP) = (High + Low + Close) / 3

First Resistance (R1) = (2 × PP) - Low

Support 1 (S1) = (2 × PP) - High

Second Resistance (R2) = PP + (High - Low)

Support 2 (S2) = PP - (High - Low)

These levels are calculated based on the previous day's price action, with the pivot point serving as the central reference point. Traders use these levels to identify potential entry and exit points in their trading strategies.

How to Use Pivot Calculations

Using pivot calculations effectively involves several steps:

Identify the previous day's high, low, and close prices.
Calculate the pivot point and the associated support and resistance levels using the formulas above.
Plot these levels on your trading chart to visualize potential price movements.
Use the levels to identify potential entry and exit points in your trading strategy.
Monitor price action to confirm or invalidate the pivot levels.

Pivot levels are not guaranteed to hold and should be used as part of a broader trading strategy rather than as absolute predictions.

Common Pivot Levels

The pivot calculation method identifies several key levels that traders commonly use:

Pivot Point (PP): The central reference point based on the previous day's price action.
First Resistance (R1): The first level of resistance above the pivot point.
Support 1 (S1): The first level of support below the pivot point.
Second Resistance (R2): A higher level of resistance above the first resistance level.
Support 2 (S2): A lower level of support below the first support level.

These levels are used to identify potential price reversals and continuation trends in the market.

FAQ

What is the pivot point formula used by Real Tick Reference?: The pivot point formula used by Real Tick Reference is the standard pivot point calculation based on the previous day's high, low, and close prices.
How accurate are pivot point calculations?: Pivot point calculations provide a useful framework for identifying potential support and resistance levels, but they are not guaranteed to hold. Traders should use them as part of a broader analysis.
Can pivot points be used for all time frames?: Pivot points are typically calculated for daily charts, but traders can adapt the method for other time frames by using the appropriate high, low, and close prices.
What are the most important pivot levels to watch?: The most important pivot levels to watch are the pivot point itself, the first resistance and support levels (R1 and S1), and the second resistance and support levels (R2 and S2).
How often should pivot points be recalculated?: Pivot points should be recalculated each trading day based on the previous day's price action to reflect the most current market conditions.