Trade Forex Trading

Pivot Points Technical Analysis & Pivot Points Signals

This xauusd/gold indicator consists of a central pivot which is surrounded by 3 resistance levels below & 3 support levels above.

Initially these points were used by floor traders to analyze & trade the equities and futures xauusd markets. This xauusd indicator is considered to be leading rather than lagging.

Pivots provide a quick way for traders to analyze and interpret the general trend of how the market is going to be moving during the course of the trading day. A few simple calculations are used to plot the resistance & support zones.

To calculate these points for the coming day, the previous day's

  • high,
  • low, and
  • closing prices are used

The trading day closes and this daily closing time is when the technical indicator is updated.

The 24-hour cycle for this trading indicator are calculated using a complex formula. Central pivot is then used to calculate the support and resistance levels as follows:

Resistance 3

Resistance 2

Resistance 1

Pivot Points

Support 1

Support 2

Support 3

How Do I Use Pivot Points in Trading Chart?

XAU/USD Technical Analysis and How to Generate Trading Signals

This xauusd/gold indicator can be used in various ways to generate signals. Following methods are the most regular trading analysis:

XAU/USD Trend Identification Signals

The central pivot point is used by the online traders to identify the general market xauusd trend direction. Trades opened will only be in the direction of the trend.

  • Buy signal - price is above the center pivot point
  • Sell signal - price is below the center pivot point

XAUUSD Price Break Out Signals

XAUUSD Price break out signals are generated as follows

  • Buy signal - is generated/derived when the price breaks out upward through the central point.
  • Sell signal - is generated/derived when price breaks out down-ward through the central point.

Pivot Levels - How to Add Pivot Points in Trading Chart

XAUUSD Price Break out

XAUUSD Price Reversal Signal

XAUUSD Price reversals are generated as follows

Buy Signal- when price moves downward towards one of the support level, then touches support or moves slightly through it then quickly reverses & moves upwards.

Sell Signal- when price moves upward towards one of the resistance area, then touches resistance or moves slightly through it then quickly reverses & moves downward.

How Do You Place Pivot Points on Trading Chart?

XAUUSD Price Reversal Signal

Placing Stop Loss and Limit Profit Values

The central pivot and the other support and resistance levels are used by the online traders to figure out suitable stop loss order and limit profit levels.

Setting Stop loss and Limit Profit Support Resistance Areas

Placing Stop Loss 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, and the Support 1 can be set as a Stop Loss Order Area for the trade.

To Download this Pivot Points Indicator:

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

Once you download the technical indicator. Open it with the MQ4 Language MetaEditor, Then Compile the indicator by pressing Compile Button & it will be added to your MT4.

Note: Once you add it to your MetaTrader 4, the technical indicator has additional lines marked Mid-Points, to remove the additional lines open MQ4 Meta Editor(shortcut key board key - press F4), and change line 16 from:

Extern bool mid-pivots = true:

To

Extern bool mid-pivots = false:

Then Press Compile button again, and the technical indicator will then appear such as illustrated and shown on this web site.

Learn More Lessons & Topics:

Forex Market Traders Seminar Gala

Forex Market Traders Seminar

XAUUSD Broker