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Pivot Points Stock Indices Technical Analysis and Pivot Points Stock Indices Signals

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


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


Pivots provide a quick way for stock index traders to analyze the general stock indices trend of how the stock indices market is going to be moving during the course of the day. A few simple calculations are used to draw the resistance and support levels.


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


  • high,

  • low, and

  • close stock indices prices are used

The stock index trading day closes at 5:00PM EST this daily closing time is when the 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 Technical Stock Indices Indicator



Stock Indices Technical Analysis and Generating Stock Indices Signals


This indicator can be used in different ways to generate stock index trading signals. The following methods are the most common technical analysis:


Stock Indices Trading Trend Identification Signals

The central pivot is used by stock index traders to determine the general market stock indices trend direction. The trades taken will only be in the direction of the stock index trend.


  • Buy signal - stock index price is above the central point

  • Sell signal - stock index price is below the central point


Indices Price Breakout Signals

Indices Price breakout signals are generated as follows


  • Buy signal- is generated when the stock index price breaks upwards through the central point.

  • Sell signal- is generated when the stock index price breaks downwards through the central point.


Indices Price Breakout above Pivot Points Stock Indices Indicator

Indices Price Breakout


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Indices Price Reversal Stock Indices Signal

Indices Price reversals are generated as follows


Buy signal- when stock index price moves down towards one of the support level, then touches the support or moves slightly through it then quickly reverses and moves upwards.

Sell signal- when stock index price moves up towards one of the resistance level, then touches the resistance or moves slightly through it then quickly reverses and moves downwards.


Indices Price Reversal Stock Indices Signal Pivot Points Trading

Indices Price Reversal Stock Indices Signal


Setting Stop loss and Limit Profit Values

The central pivot and the other support and resistance levels are used by stock index traders to determine suitable stop loss and limit profit levels.

Setting Stop loss and Limit Profit Support Resistance Levels

Setting 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 the Stop Loss Stock Indices 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 Editor, Then Compile it by pressing the Compile Button and it will be added to your MT4.



NB: Once you add it to your MT4, the indicator has additional lines named Mid Points, to remove these additional lines open MQL4 Language Editor(shortcut keyboard key - press F4), and change line 16 from:

extern bool midpivots = true;

to

extern bool midpivots = false;

Then Press Compile again, and it will then appear as exactly shown on this website.

 

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