Pivot Points Technical Analysis & Pivot Points Signals
This xauusd 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 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 levels.
To calculate these points for the coming trading day is the previous day's
- high,
- low, and
- close prices are used
The trading day closes & this daily closing time is when the 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 areas as follows:
Resistance 3
Resistance 2
Resistance 1
Pivot Points
Support 1
Support 2
Support 3
XAUUSD Technical Analysis and How to Generate Signals
This xauusd indicator can be used in different ways to generate trading signals. Following methods are the most common technical analysis:
XAUUSD Trend Identification Signals
The central pivot is used by traders to determine the general market xauusd trend direction. Trades taken only will 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 when the price breaks-out upward through the central point.
- Sell signal - is generated when price breaks-out down ward through the central point.
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 downwards.
XAUUSD Price Reversal Signal
Placing Stoploss & Limit Profit Values
The central pivot & the other support & resistance zones are used by traders to determine suitable stop loss and limit profit levels.
Placing Stoploss & 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 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 indicator has additional lines named MidPoints, to remove the additional lines open MQ4 Meta Editor(shortcut key-board key - press F4), & change line 16 from:
Extern bool mid-pivots = true:
To
Extern bool mid-pivots = false:
Then Press Compile button again, and the indicator will then appear as depicted on this site.
