Trade Forex Trading

Pivot Points Analysis & Pivot Points Signals

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

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

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

To calculate these points and levels for the coming day is the previous day's

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

The FX day closes at 5:00P.M. EST this daily closing time is when the trading indicator is updated.

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

Resistance 3

Resistance 2

Resistance 1

Pivot Point

Support 1

Support 2

Support 3

Pivot Points Trading Analysis - Indicators MT4 Pivot Points - How Do I Build Pivot Points Trade System?

Forex Analysis and How to Generate Signals

This indicator can be used in different ways to generate Forex signals. The following methods are the most regular technical analysis:

Trend Identification Signals

The center pivot point is used by the traders to determine the general price trend direction. The trade transactions taken and opened will only be in line with the direction of the market price trend.

  • Buy signal - price is above the central pivots point
  • Sell trading signal - price is below the central pivot point

Price Break Out Signals

Price breakout trade signals are derived and generated as follows

  • Buy signal - is generated/derived when the price breaks-out upwards through the central point.
  • Sell signal - is derived & generated when price breaks-out downward through the central point.

How to Build a Pivot Points Strategy

Price Breakout

Price Reversal Signal

Price reversals are derived and generated as follows

Buy Signal- when price moves downwards toward one of the support level, then touches support or moves just slightly through it then quickly reverses and moves and heads upwards.

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

Pivot Point Levels - How to Build a Pivot Points System

Price Reversal Signal

Setting Stop loss & Limit Profit Values

The center pivot & the other support & resistance areas are used by the traders to identify suitable stop loss & limit profit levels.

Setting Stoploss & Limit Profit Support Resistance Levels - Pivot Points Analysis

Setting Stoploss and Limit Profit

If a buy signal is placed above the central point the Resistance 1 or Resistance 2 can be used to set takeprofit level, & the Support 1 can be set as a Stop Loss Level for the trade position.

To download Pivot Points Leves Indicator:

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

Once you download it. Open it with the MQL4 Language MetaEditor, Then Compile the indicator by clicking Compile Button and it will be added to your MT4 Trading Software.

NB: Once you as a trader add it to your MT4 Platform, the indicator has extra lines known as MidPoints, to remove these additional lines open MQL4 MetaEditor(short cut key board key - tap F4), and change line 16 from:

Extern bool mid-pivots = true:

To

Extern bool mid-pivots = false:

Then Press Compile Button again, and it then will appear and be shown just as displayed on this web-site.

Learn More Lessons and Tutorials and Topics:

Forex Malaysia Seminar

Forex Thailand Seminar

Forex Broker