Firstly : Keep in mind HPFZ is limited to finding intra day
resistance and support areas and not for the zone analysis.
How is it calculated ? Very easy
FibZone Pivots
Pivot Point (PP) = (H+L+C)/3
Daily Range (DR) = (H-L)
First Resistance (Rl) = PP + 0.5*DR
Second Resistance (R2) = PP + DR
First Support (Sl) = PP - 0.5*DR
Second Resistance (S2) = PP - DR
Resistance Band (RB 1) = PP + 0.61 8*DR
Support Band (SB 1) = PP - 0.6 18*DR
Resistance Band (RB2) = PP + 1.382*DR
Support Band (SB2) = PP - 1.382*DR
How can it be used?
>> in Up-trend :
1. Take only Buy , wait for price to go below the pivot, best to touch S1 or S2 and rarely will touch S3
2. Find a reversal Price action sign, patterns, MA, candlestick , RSI, whatever you are comfy with.
3. Open Long above S1 or S2
4. Target 1 = Pivot point , Target 2 = R 1 and Target 3 is R2 . in rare cases Trend will be strong and reach R3
5. Stop loss is placed below S2 if you opened at S1 , places below S1 if you opened at pivot, and places at S3 if you entered at S2
In a down trend, same above steps in reverse.
It is worth mentioning : These levels are static levels, they don't move, they are based on previous daily OHLC numbers, so this is best for day trader.
This is a combinations of Descriptive + Statistical Technical analysis = which is the strongest method in trading.
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