Pivot Points Commodity Trading Technical Analysis & Pivot Points Trading Signals
This commodity technical indicator consists of a central pivot which is surrounded by Three resistance levels below & Three support levels above.
Initially these points were used by floor traders to analyze and trade the equities & futures commodity markets. This commodity technical technical indicator is considered to be leading rather than lagging.
Pivots provide a quick way for commodities traders to analyze the general commodity trend of how the commodities trading market is going to be moving during the course of the day. A few simple calculations are used to plot the resistance and support levels.
To calculate these points for the coming trading day is the previous day's
- high,
- low, and
- close commodity prices are used
The commodity trading day closes & this daily closing time is when the indicator is updated.
The 24-hour cycle for this indicator are calculated using a complex formula. Central pivot is then used to calculate the support and resistance areas as follows:
Resistance 3
Resistance 2
Resistance 1
Pivot Point
Support 1
Support 2
Support 3
Commodity Trading Technical Analysis & How to Generate Trading Signals
This commodity technical indicator can be used in different ways to generate commodities signals. Following techniques are the most common technical analysis:
Commodity Trend Identification Signals
The central pivot is used by traders to determine the general market commodity trend direction. Trades taken will only be in the direction of the market trend.
- Buy signal - commodity price is above the central point
- Sell signal - commodity price is below the central point
Commodity Trading Price Break out Signals
Commodity Trading Price breakout signals are generated as follows
- Buy signal - is generated when price breaks-out upward through the central point.
- Sell signal - is generated when the price breaks out downwards through the central point.
Commodity Trading Price Break-out
Commodity Trading Price Reversal Trading Signal
Commodity Trading Price reversals are generated as follows
Buy Commodity Signal- when the price moves down toward one of the support level, then touches the support or moves just slightly through it then quickly reverses and moves upward.
Sell Commodities Signal- when the price moves up toward one of the resistance area, then touches the resistance or moves just slightly through it then quickly reverses and moves downward.
Commodity Trading Price Reversal Trading Signal
Setting Stoploss & Limit Profit Values
The central pivot and the other support and resistance levels are used by traders to determine suitable stop loss & limit profit levels.
Setting Stoploss and Limit Profit
If a buy is placed above the central point the Resistance 1 or Resistance 2 can be used to set the take profit level, & the Support 1 can be set as the Stop-Loss Commodity Trading Order Level for the trade.
To download Pivot points:
https://c.mql5.com/21/9/pro4x_pivot_lines.mq4
Once you download it open it with MQL4 Language MetaEditor, Then Compile the technical indicator by pressing Compile Button Key & it'll be added to your MetaTrader 4.
Note: Once you add it to your MetaTrader 4, the technical indicator has additional lines named MidPoints, to remove the additional lines open MQL4 Meta Editor(shortcut keyboard key - press F4), and change line 16 from:
Extern bool midpivots = true:
To
Extern bool midpivots = false:
Then Press Compile button again, & it'll then appear as is exactly displayed on this site.
