In this post, we have highlighted the extreme power of Pivot line and Exponential Moving Average when used together. The Pivot line we have used to demonstrate the power is the Weekly Pivot (calculation shown below). And the type of Moving Average we have used is “Exponential”. The number of period for the Exponential Moving Average used here is 50.
We have demonstrated the extreme effect of these two trading elements (Pivot line and Exponential Moving Average) by using them together in two charts. The first chart is for the currency period GBP/AUD (Sterling Aussie or Pound Aussie) and second chart is for the currency period GBP/USD (Sterling Dollar or Pound Dollar) as shown below to show the power you can be benefited by using Pivot line and Exponential Moving Average together.
Weekly Pivot can be calculated as equal to (last week’s high value + last week’s low value + last week’s close value) / 3
50 period weekly Exponential Average (50 EMA) can be calculated as below:
pe = 2 / (50+1)
50 EMA = (close level of the week * pe) + (last week’s moving average * (100 – pe))
Please don’t worry about these calculations, since they are for the academics, as most of the computers plot them on your chart automatically. Now let us take advantage of using Pivot line and Exponential Moving Average together on last week’s chart for GBP/AUD (Sterling Aussie or Pound Aussie) as shown below. Last week’s setting of Pivot + EMA for GBP/AUD captured a massive 469 pips in 5 days.
Below chart is for the currency period GBP/USD (Sterling Dollar or Pound Dollar) as shown below to show the power you can be benefited by using Pivot line and Exponential Moving Average together. Last week’s setting of Pivot + EMA for GBP/USD captured a massive 352 pips in 5 days.
Both put together have captured a stupendous 821 (469 + 352) points for the said 2 currency pairs.
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