Accolades for Todd Hanson Ph.D.

Fulcrums:
Fixed price points that
act like magnets
 Fulcrums
What is a Fulcrum?
• The support about which a lever turns
• Statistically to be points of inflexion

To fine tune our trading plan—in volatile, liquid

instruments we add the Fulcrum grid:
• 00: aka “the figure” fulcrum
• 20: - pips over “the figure”
• 50: aka “half the figure” fulcrum
• 80: - pips over “the figure”
 Fulcrum Examples
EURUSD EURJPY
1.4000 134.00
1.4020 134.20
1.4050 134.50
1.4080 134.80
1.4100 135.00
Fulcrum Examples
 Fulcrums
Natural Support and Resistance
 Making 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 Key
Fulcrums “Midpoint Danger Area”
00
90
80
65
50
35
20
10
00

You are allowed +/- 3 PIPS from the Fulcrums

 Pivot Points:
Calculated Support and Resistance;
We all see them because we all use them
 Forex 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
• DATE: WORK SHEET
• Important News: Let’s see if there are any important news that happen
for the past few hours:
• Important Economic Indicators/numbers for today

• Key Supports/ Resistance Levels/ pivot

Use calculator and 5pm (NYC) prior day close
Resistance 3 = High + 2*(Pivot - Low)
Resistance 2 = Pivot + (R1 - S1)
Resistance 1 = 2 * Pivot - Low
Pivot Point = ( High + Close + Low )/3
Support 1 = 2 * Pivot - High
Support 2 = Pivot - (R1 - S1)
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
Forex Pivot Point Trading Tips

S1 R1

S2
R2

S3
R3

PIVOT
 Forex Pivot Point Trading Tips

P
R
I
C
E
DAILY
PIVOT R
A
N
G
E
 Confluence:
Where two, three, the more the better,
of the Hanson puzzle pieces come together
 Market Confluence

Confluence – Noun
1. a place where rivers flow into
one another

2. a gathering [Latin confluere

to flow together]
 Points of Confluence

Points of Confluences that we look

for include:
– Moving Averages
– Support and Resistance on the chart
– Fulcrums
– Previous High/Low Points
– Breakdown & Retest levels
– Pivot Points
 False Confluence
Traders often imagine false confluence
as a result of the following pitfalls:
– Wishful thinking
– Picking tops and bottoms
– Impatience or need to be in a trade
– Trading too many pairs at once
– Fear and Greed