Pivot Points Indices Technical Analysis & Pivot Points Stock Indices Signals

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

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

Pivots provide a quick way for stock traders to analyze the general trend of how the market is going to be moving during the course of the 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 stock prices are used

The stock trading day closes at 5:00PM EST this daily market closing time is when the technical indicator is updated.

The 24-hour cycle for this indicator are calculated using a complex formula. Central pivot is then used to calculate the support and resistance areas as follows:

Resistance 3

Resistance 2

Resistance 1

Pivot Point

Support 1

Support 2

Support 3

Technical Analysis & How to Generate Trading Signals

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

Trend Identification Signals

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

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

Price Breakout Signals

Price break out signals are generated as follows

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

Price Break out

Price Reversal Stock Indices Signal

Price reversals are generated as follows

Buy Trading Signal- when the price moves down toward one of the support level, then touches support or moves just slightly through it then quickly reverses and moves upward.

Sell Indices Signal- when price moves up toward one of the resistance area, then touches the resistance or moves slightly through it then quickly reverses and moves downward.

Price Reversal Stock Indices Signal

Setting Stoploss & Limit Profit Values

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

Setting Stoploss & 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 a Stop Loss Stock Indices Order Level for the trade.

To download this Pivot points 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 technical indicator by pressing Compile Button and it'll be added to your MT4.

Note: Once you add it to your MetaTrader 4, the indicator has additional lines named MidPoints, to remove the extra lines open MQL4 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 Press Compile button again, & it'll then appear as is exactly displayed on this site.