For math fans though this is how the mainline formula looks like. The pivot point formula that is used for day trading is derived from the high low and the previous days closing price. In fact the best suggestion you can follow is to leave out emotions from your trading activity and focus on the technical execution only.
For math fans though this is how the mainline formula looks like.
For example if one is trading on a 100 share and has the stop loss at 3 which is 97 against an expected gain of 6 for a 12 risk reward ratio. This calculation is from the Kelly Criterion which is a calculus derived formula that is designed to maximize bankroll growth via optimized stake sizes. Set a percentage or dollar risk limit youll risk on each trade. From this pivot point the resistance levels are calculated as follows.