Gold Pivot Points

Pivot points is a set of indicators developed 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 and resistance.

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

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

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

A pivot-point is a xauusd price level of significance in trading 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 & 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 & above central point, respectively, by either subtracting or adding price differentials calculated from previous trading ranges.

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

In an up-trend, the pivot-point & the resistance zones 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 levels as follows:

Pivot points consist of a central point level surrounded by three support levels below it and three resistance zones 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 trading indicator. All that's required to calculate the pivot points for the upcoming (current) day is the previous day high, low, and close gold prices. The 24-hour cycle pivot points in this trading indicator are calculated according to the following formulas:

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

Resistance 3

Resistance 2

Resistance 1

Pivot Point

Support 1

Support 2

Support 3

XAUUSD Pivot Points Support & Resistance Levels - Pivot Points Analysis Strategy Method

Pivot Points Support and Resistance Areas

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 trading indicator is a leading indicator that provides signals of potentially new highs or lows within a given chart time frame.

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 & breaks through the pivot point, the first or second resistance zone is often a good target to close a position, as the probability of resistance and reversal increases greatly, with every resistance zone.

In pivot point analysis three levels are oftenly recognized above & 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 areas.

Pivot Points

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

XAUUSD 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 market 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 Breakouts: In xauusd price breakouts, a bullish buy signal occurs when price breaks out up through the central point or one of the resistance zones (typically Resistance Area 1). A short sell signal occurs when the price breaks out downwards through the center point or one of the support levels (typically Support Zone 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, and then reverses and starts heading in the other direction.

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 MQ4 Language MetaEditor, Then Compile the indicator by pressing the Compile Button 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 the extra lines open MQL4 Language Meta-Editor(shortcut key-board key - press F4), and change line 16 from:

Extern bool mid-pivots = true:

Extern bool mid-pivots = false:

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

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