Pivot Point Support and Resistance Level Technical Indicator

Pivot Points Analysis and 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 trade the equities and futures exchange markets. This 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 day is the previous day's

high,
low, and
close prices are used

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

The 24-hour cycle for this trading indicator are calculated using a complex formula. The central pivot is then used to calculate the support & 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 Trading System?

FX Analysis and How to Generate Signals

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

Trend Identification Signals

The central pivot is used by traders to determine the general price trend direction. The trade transactions taken only will be in direction of the market trend.

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

Price Break Out Signals

Price breakout trade signals are generated as follows

Buy signal - is generated when the price breaks-out upwards through the central point.
Sell signal - is generated when price breaks out downwards through the central point.

How to Build a Pivot Points Strategy

Price Breakout

Price Reversal Signal

Price reversals are generated as follows

Buy Trade Signal- when price moves down toward one of the support level, then touches support or moves just slightly through it then quickly reverses & moves upward.

Sell Trading Signal- when price moves up toward 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 central pivot and the other support and resistance areas are used by traders to determine suitable stoploss order and limit profit levels.

Setting Stop loss and Limit Profit Support Resistance Levels - Pivot Points Indicator Analysis

Setting Stop loss & 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 trading Trading 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 & it will be added to your MetaTrader 4 Trading Software.

NB: Once you add it to your Meta Trader 4 Trading Software, the trading 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:

Extern bool mid-pivots = false:

Then Press Compile Button again, & it will then appear as displayed on this site.

Learn More Lessons & Topics:

Trade Forex Trading

Pivot Points Analysis and Pivot Points Signals

FX Analysis and How to Generate Signals