Trade Bitcoin Trading

Bitcoin Pivot Points

Pivot points are a group of indicators made by traders in commodity markets to find possible turning points, also called "pivots." These points are figured out to find levels where the feeling about the bitcoin trend could switch from "going up" to "going down." Bitcoin traders use these points to mark support and resistance.

These points are calculated as the average mean of the high, low, and close from the previous trading session:

BTCUSD Pivots Points = (High + Low + Close) / 3

Day traders rely on pivot points to identify entry levels, stop losses, and profit-taking zones, aiming to predict areas where other traders might act similarly in the Bitcoin market.

A pivot is a key bitcoin price that traders use to predict where the bitcoin price will go, when studying a financial market. It's found by averaging important bitcoin prices (high, low, and close) from how the market did before. If bitcoin prices trade higher than the average in the next period, it usually means prices will go up, but if the bitcoin price is lower than the average, it means prices will fall.

The middle point is used to figure out extra support and resistance levels, both below and above it, by either subtracting or adding bitcoin price differences from past ranges.

A pivot point with its support and resistance lines often flips the Bitcoin price direction.

  • In an up btcusd trend, the pivot point & the resistance levels may represent a ceiling level for the bitcoin price. If bitcoin price goes above this level the up bitcoin trend is no longer sustainable & a bitcoin trend reversal may occur.

  • In a down bitcoin trend, a pivot point & the support levels may represent a low for bitcoin price level or a resistance to further decline.

The center pivot can then be used in calculating the support & resistance levels as follows:

Pivot points have one main level in the middle with three support levels under it and also three resistance levels above it. These points were first used by traders working on the floors of stock and futures exchanges because they gave those traders a fast way to get a basic idea of what direction the btcusd market was going in during the day using some simple math. But, over the years they have also been very helpful and valuable in other markets too.

One of the reasons they are now so popular is because they are considered a "leading" (or predictive) indicator rather than a lagging technical indicator. All that's needed to calculate these pivot point levels for the upcoming (current) day is the previous day's high, low, & close bitcoin prices. The 24-hour cycle pivot points in this trading indicator are calculated in accordance to the following formulas:

The center pivot can then be used in calculating the support & resistance levels as follows:

Resistance 3

Resistance 2

Resistance 1

Pivot Point

Support 1

Support 2

Support 3

Pivot Points for Support and Resistance - Pivot Indicator on BTC/USD Charts

Pivot Point Support and Resistance Areas

Pivot Point as a Bitcoin tool

The pivot point line signifies a key level of either major resistance or support, influenced by the prevailing market sentiment. In a situation where the btcusd market lacks direction and remains in a range, bitcoin prices often experience significant fluctuations around this pivot level until a breakout occurs. Prices of bitcoin that are either above or below this central point indicate the general sentiment, interpreted as bullish or bearish, respectively. This btcusd indicator serves as a leading signal, suggesting possible peaks or troughs within a specific timeframe.

The support and resistance levels figured out from the main turning point and the past market range can be used to exit Bitcoin trades, but not to enter them. As an example, if the btcusd price is rising and goes past the pivot point, the first or second resistance area is often a good spot to sell because it's very likely to meet resistance and change direction at each level.

In pivot-point analysis, there are generally three levels that are above and below the center point. These values are calculated using how much the bitcoin price moved in the previous time, and they are then added to the center point for resistance areas and subtracted for support areas.

Pivots Points

Pivot point levels can be utilized in various ways. Here are a couple of the most common methods for employing them:

BTCUSD Trend Direction: When used with other ways to look at Bitcoin, like checking if it's bought too much or sold too much, or how jumpy it is, the main point can help show which way the price is likely to go. Trades are only started in the same direction as the BTC/USD Crypto trend. Buying happens only when the bitcoin price is higher than the main point, and selling happens only when the bitcoin price is lower than the center turning point.

BTCUSD Price Break Outs: In bitcoin price breakouts, a bullish buy cryptocurrency signal forms when the bitcoin price breaks upward through the center point or one of the resistance areas (commonly Resistance Level 1). A short sell cryptocurrency signal occurs and happens when bitcoin price breaks out downward through the center point or one of the support zones (often Support Area 1).

When BTCUSD crypto trends reverse, a buy signal shows up when the Bitcoin price gets close to support, touches it, and then goes up.

To download Pivot points Indicator:

https://c.mql5.com/21/9/pro4x_pivot_lines.mq4

Once you download it open it with MQL4 Language Editor, Then Compile it by pressing the Compile Button and it will be added to your MT4.

Note: Once you as a trader add it to your MetaTrader 4, trading indicator has extra additional lines marked Mid Points, to remove these additional lines open the MQ4 Language MetaEditor(short cut keyboard key - press F4), and change line 16 from:

Extern bool midpivot = true:

To

Extern bool midpivot = false:

Then Press the Compile button again, & it'll then be shown as exactly shown & displayed on www.tradeforextrading.com web site.

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