Accolades for Todd Hanson Ph.D.Accolades for Todd Hanson Ph.D.

Fulcrums:Fulcrums:Fixed price points that Fixed price points that

act like magnetsact like magnets

What is a Fulcrum?What is a Fulcrum?• The support about which a lever turns The support about which a lever turns • Statistically to be points of inflexionStatistically to be points of inflexion

To fine tune our trading plan—in volatile, liquid To fine tune our trading plan—in volatile, liquid instruments we add the Fulcrum grid:instruments we add the Fulcrum grid:

• 00: aka “the figure” fulcrum00: aka “the figure” fulcrum• 20: - pips over “the figure”20: - pips over “the figure”• 50: aka “half the figure” fulcrum50: aka “half the figure” fulcrum• 80: - pips over “the figure”80: - pips over “the figure”

FulcrumsFulcrums

Fulcrum ExamplesFulcrum Examples

EURUSDEURUSD EURJPYEURJPY1.40001.4000 134.00134.001.40201.4020 134.20134.201.40501.4050 134.50134.501.40801.4080 134.80134.801.41001.4100 135.00135.00

Fulcrum ExamplesFulcrum Examples

FulcrumsFulcrumsNatural Support and ResistanceNatural Support and Resistance

Making Use of FulcrumsMaking Use of Fulcrums• Fulcrums are natural points of confluence “Magnets”

• Prices gravitate from fulcrum to fulcrum so entering At or Near a fulcrum is key

• When entering the trade, look for the opportunity where the pair exhausts itself on a retracement to the last passed fulcrum

• When possible, avoid entering trades that are at midpoints between fulcrums

Fulcrum KeyFulcrum KeyFulcrumsFulcrums “Midpoint Danger Area”“Midpoint Danger Area”

00009090

80806565

50503535

20201010

0000

You are allowed +/- 3 PIPS from the FulcrumsYou are allowed +/- 3 PIPS from the Fulcrums

Pivot Points:Pivot Points:Calculated Support and Resistance;Calculated Support and Resistance;

We all see them because we all use themWe all see them because we all use them

Forex Pivot PointsForex Pivot Points• Professional traders and market makers use

pivot points to identify important support and resistance levels.

• Simply put, a pivot point and its support/resistance levels are areas at which the direction of price movement can possibly change.

BEGINNING OF TRADING DAY WORK SHEET• DATE:DATE:

• Important NewsImportant News: Let’s see if there are any important news that happen for : Let’s see if there are any important news that happen for the past few hours: the past few hours:

• Important Economic Indicators/numbers Important Economic Indicators/numbers for todayfor today

• Key Supports/ Resistance Levels/ pivotKey Supports/ Resistance Levels/ pivotUse calculator and 5pm (NYC) prior day closeUse calculator and 5pm (NYC) prior day close

Resistance 3 = High + 2*(Pivot - Low)Resistance 3 = High + 2*(Pivot - Low)Resistance 2 = Pivot + (R1 - S1)Resistance 2 = Pivot + (R1 - S1)Resistance 1 = 2 * Pivot - LowResistance 1 = 2 * Pivot - LowPivot Point = ( High + Close + Low )/3Pivot Point = ( High + Close + Low )/3Support 1 = 2 * Pivot - HighSupport 1 = 2 * Pivot - HighSupport 2 = Pivot - (R1 - S1)Support 2 = Pivot - (R1 - S1)Support 3 = Low - 2*(High - Pivot)Support 3 = Low - 2*(High - Pivot)

S3 S2 S1 Pivot R1 R2 R3

EURUSD

GBPUSD

EURJPY

USDJPY

Forex Pivot Point Trading Tips

Here are some easy to memorize tips that will help you to make smart pivot points trading decisions.

• If price at PP, watch for a move back to R1 or S1.• If price is at R1, expect a move to R2 or back towards PP.• If price is at S1, expect a move to S2 or back towards PP.• If price is at R2, expect a move to R3 or back towards R1.• If price is at S2, expect a move to S3 or back towards S1.• If there is no significant news to influence the market, price will usually

move from P to S1 or R1. • If there is significant news to influence the market price may go straight

through R1 or S1 and reach R2 or S2 and even R3 or S3.• R3 and S3 are a good indication for the maximum range for extremely

volatile days but can be exceeded occasionally. • Pivot lines work well in sideways markets as prices will most likely range

between the R1 and S1 lines. • In a strong trend, price will blow through a pivot line and keep going

PIVOT

S1

S2

S3R3

R2

R1

Forex Pivot Point Trading Tips

DAILYPIVOT

PR ICE RANGE

Forex Pivot Point Trading Tips

Confluence:Confluence:Where two, three, the more the better, Where two, three, the more the better,

of the Hanson puzzle pieces come togetherof the Hanson puzzle pieces come together

Confluence – Noun

1. a place where rivers flow into one another

2. a gathering [Latin confluere to flow together]

Market ConfluenceMarket Confluence

Points of ConfluencePoints of Confluence

Points of Confluences that we look Points of Confluences that we look for include:for include:– Moving AveragesMoving Averages– Support and Resistance on the chartSupport and Resistance on the chart– FulcrumsFulcrums– Previous High/Low PointsPrevious High/Low Points– Breakdown & Retest levelsBreakdown & Retest levels– Pivot PointsPivot Points

False ConfluenceFalse Confluence

Traders often imagine false confluence Traders often imagine false confluence as a result of the following pitfalls:as a result of the following pitfalls:– Wishful thinkingWishful thinking– Picking tops and bottomsPicking tops and bottoms– Impatience or need to be in a tradeImpatience or need to be in a trade– Trading too many pairs at onceTrading too many pairs at once– Fear and GreedFear and Greed