Pivot Points Commodities Analysis and Pivot Point Trading Signals

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

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

Pivots provide a quick way for traders to analyze the general commodity trend of how the commodity market is going to be moving during the course of the trading day. A few simple calculations are used to plot the resistance and 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 at 5:00PM EST this daily market 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 & resistance areas as follows:

Resistance 3

Resistance 2

Resistance 1

Pivot Point

Support 1

Support 2

Support 3

Commodities Analysis and Generating Trade Signals

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

Trend Identification Signals

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

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

Trading Price Break-out Signals

Price breakout trading signals are generated as follows

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

Price Break-out

Price Reversal Trading Signal

Price reversals are generated as follows

Buy Trading Signal- when price moves down towards one of the support area, then touches the support or moves slightly through it then quickly reverses and moves upwards.

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

Price Reversal Trading Signal

Setting Stop loss & Limit Profit Values

The central pivot and the other support and resistance levels are used by traders to determine suitable stop loss and limit profit 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, & the Support 1 can be set as the StopLoss Trading Order Level for the trade.

To download Pivot points Indicator:

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

Once you download it open it with MQL4 Language MetaEditor, Then Compile the technical indicator by pressing the Compile Button Key & it will be added to your MetaTrader 4.

NB: Once you add it to your MetaTrader 4, the technical indicator has additional lines named Mid-Points, to remove the additional lines open MQL4 Meta Editor(shortcut key-board key - press F4), & change line 16 from:

Extern bool midpivots = true:

To

Extern bool midpivots = false:

Then Press Compile button again, & it will then appear as shown on this site.