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Computerized Investing > Fourth Quarter 2013

Pivot Points

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by CI Staff

Support and resistance levels are important because they represent points at which major price movements are expected to occur. Being able to identify these levels in order to act on upon the expected price movement is important to traders and short-term investors, as well as long-term investors looking for a buy or sell point.

One common method of identifying support or resistance levels is using pivot points. Furthermore, pivot points can help determine the direction of the market and as such are leading or predictive indicators. They were originally used by floor traders to set key levels of support or resistance. Here we discuss how to calculate and interpret them.

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