Gold Pivot Points

Pivot points is a set of indicators created by floor traders in the commodities markets to ascertain potential turning points, also known as 'pivots'. These points are calculated to determine levels in which the sentiment of the trend could change from 'bullish' to 'bearish.' traders use these points as markers of support & resistance.

These points are calculated as the average of the high, low & close from the previous session:

Gold Pivot Point = (High + Low + Close) / 3

Day traders use the calculated pivot-points to determine the levels of entry, stops & profit taking, by trying to determine where majority of other traders may be doing the same.

A pivot-point is a xauusd price level of significance in technical analysis of a financial market that is used by traders as a predictive indicator of price movement. It is calculated as an average of significant xauusd prices (high, low and close) from the performance of a market in the prior trading period. If the xauusd prices in the following period trades above the central point it's usually evaluated as a bullish sentiment, whereas if price below the central point is seen as bearish.

The central point is used to calculate additional levels of support & resistance, below and above central point, respectively, by either subtracting or adding price differentials calculated from previous trading ranges.

A pivot & the associated support and resistance levels are often turning points for the direction of price movement in a market.

• In an up trend, the pivot-point & the resistance levels may represent a ceiling level for the xauusd price. If price goes above this level the up trend is no longer sustainable & a trend reversal may occur.

• In a down trend, a pivot-point & the support levels may represent a low for xauusd price level or a resistance to further decline.

The central pivot-point can then be used to calculate the support & resistance zones as follows:

Pivot points consist of a central point level surrounded by three support levels below it and three resistance levels above it. These points were originally used by floor traders on equity and futures exchanges because they provided a quick way for those traders to get a general idea of how the xauusd market was heading during the course of the day using a few calculations. However, over time they have also proved exceptionally useful in other markets as well.

One of the reasons they are now so popular is because they are considered a 'leading' (or predictive) indicator rather than a lagging indicator. All that is required to calculate the pivot points for the upcoming (current) day is the previous day high, low, and close xauusd prices. The 24-hour cycle pivot points in this indicator are calculated according to the following formulas:

Central pivot can then be used to calculate the support & resistance zones as follows:

Resistance 3

Resistance 2

Resistance 1

Pivot Point

Support 1

Support 2

Support 3

Pivot Points Support and Resistance Levels

Pivot Points as a XAUUSD tool

The pivot point itself represents a level of highest resistance or support, depending on the overall sentiment. If the xauusd market is direction-less ( range bound ) prices will often fluctuate greatly around this level until a xauusd price breakout develops. Prices above or below the central point indicates the overall sentiment as bullish or bearish respectively. This indicator is a leading indicator that provides signals of potentially new highs or lows within a given chart timeframe.

The support and resistance levels calculated from the central pivot-point & the previous market width may be used as exit points of the open trade transactions, but are rarely used as entry signals. For examples, if the xauusd price is up-trending and breaks through the pivot point, the first or second resistance level is often a good target to close a position, as the probability of resistance and reversal increases greatly, with every resistance level.

In pivot point analysis three levels are oftenly recognized above and below the central point. These are calculated from the range of price movement in the previous trading period and then added to the central point for resistances & subtracted from it for support levels.

Pivot Points

Pivot levels can be used in many different ways. Here are a few of the most commonly techniques for utilizing them:

Gold Trend Direction: Combined with other analysis techniques such as overbought oversold oscillators, volatility measurements, etc., the central point may be useful in determining the general trending direction of the market. Trades are only opened in the direction of the trend. Buy trade transactions occur only when the price is above the central point & sell xauusd trade transactions occur only when the price is below the center pivot point.

Gold Price Break Outs: In xauusd price breakouts, a bullish buy signal occurs when the price breaks up through the central point or one of the resistance levels (typically Resistance Area 1). A short sell signal occurs when price breaks down through the center point or one of the support levels (typically Support Area 1).

Gold Trend Reversals: In trend reversals, a buy signal occurs when the price moves towards a support level, gets very near to this point, touches it, or only moves slightly through this point, & then reverses and starts moving in the other direction.

To download Pivot points technical Indicator:

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

Once you download it. open it with the MQ4 Language MetaEditor, Then Compile the indicator by pressing the Compile Button Key and it'll be added to your MT4.

NB: Once you add it to your MetaTrader 4 Platform, indicator has additional lines named Mid Points, to remove these additional lines open MQ4 Language Meta Editor(short cut keyboard key - press F4), and change line 16 from:

Extern bool mid-pivots = true:

To

Extern bool mid-pivots = false:

Then Click Compile button again, & it will then appear as depicted on www.tradegoldtrading.com web site.