I’m going through the BabyPips school and am on the pivot points section. At first read they seem arbitrary when it comes to calculating the support and resistance levels. For example:
First resistance (R1) = (2 x PP) - Low
First support (S1) = (2 x PP) - High
So what I am trying to understand is why use the number 2? I guess the person who developed the pivot points could have used anything, 1.5, 3, etc. After reading through this section my take on the pivot points is that I’m essentially marking up my chart with predetermined support and resistance lines in the hopes that others have marked the same lines. That makes me ask the question, do you use pivot points and if so can you explain the value in them that I might not be seeing? Is there not the same or greater value in creating support and resistance bands and going off of them?