Trade Stock Indices

Pivot Points Analysis and Pivot Point Signals

This indicator features a central pivot surrounded by three resistance levels below and three support levels above.

Floor traders first used these points for equities and futures. The indicator leads rather than lags.

Pivots offer a simple way for stock traders to study and understand the overall direction the market is likely to move during the trading day. Simple math is used to find the areas of resistance and support.

To calculate these points for the coming day, the previous day's

  • high,
  • low, and
  • closing prices are used

The trading day concludes, and this daily closing time is when the indicator receives its update.

The calculations for this trading technical indicator's 24-hour cycle utilize a sophisticated formula. The center pivot point is employed to assess the areas of support and resistance as outlined below:

Resistance 3

Resistance 2

Resistance 1

Pivot Point

Support 1

Support 2

Support 3

Pivot Points - Pivot Points Technical Index Technical Indicator Analysis

Indices Analysis and Generating Signals

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

Indices Trend Identification Signals

The center pivot is used by stock traders to identify the general market trend direction. The trade positions taken and opened will only be in direction of the trend.

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

Indices Price Break-out Signals

Index Price break out signals are derived and generated as follows

  • Buy signal- is generated when the price breaks upwards through the central point.
  • Sell signal- is derived & generated when the price breaks out downward through the central point.

Indices Price Breakout above Pivot Points - Pivot Points Technical Index Indicator Analysis

Indices Price Break-out

Index Price Reversal Signal

Indices Price reversals are derived and generated as follows

Buy Signal- when trading 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 Signal- when the price goes up toward a level where it usually stops, touches it or goes a bit past it, then quickly turns around and goes down.

Indices Price Reversal Signal Pivot Points Trading - Pivot Indicator Levels

Indices Price Reversal Signal

Setting Stop loss and Limit Profit Values

Stock traders use the central pivot and support or resistance levels to set stop losses and take-profit points.

Setting Stoploss and Limit Profit Support Resistance Levels - Pivot Point Indicator Levels

Setting Stop loss and Limit Profit

If a buy signal happens above the middle point, Resistance One or Resistance Two can be used to decide where to set the take profit order, and Support 1 can be used as a Stop Loss Zone for the position.

To download Pivot points Trading Indicator:

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

Once you download the indicator. Open it with the MQL4 Language Meta Editor, Then Compile the indicator by pressing the Compile Button and it will be added to your MT4.

NB: Once you as a trader add it to your MT4, the indicator has extra additional lines marked Mid-Points, to remove the additional lines open MQL4 Meta Editor(short cut keyboard key - press F4), and change line 16 from:

Extern bool midpivot = true:

To

Extern bool mid-pivot = false:

Subsequently, depress the Compile button once more, and the indicator will be displayed exactly as illustrated on this online location.

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