How to Use Pivots Points for Day Trading

Pivot Points are used by crude oil traders to find support and resistance levels based on the previous day's crude oil price action.

This technical indicator is a very useful tool that use the previous bars' highs, lows & closings to project support & resistance levels for future bars.

This technical indicator provides an idea of where key support and resistance should be. Place the pivot points on your crude oil charts and crude oil price will bounce off one of these levels. These levels are used by crude oil traders to determine market tops, market bottoms or oil trend reversals.

• Daily pivots points are calculated from previous day's high, low, close

This technical indicator is shown below

Technical Analysis in Oil Trading

The central pivot itself is the primary level, which is used to determine the trend

The other support & resistance levels are also important in calculating areas that can generate significant market movements.

This technical indicator can be used in two ways

The first way is for determining overall Oil Trading trend: if the pivot point is broken in an upward movement, then the crude oil market is bullish, and vice versa. However, pivot levels are short-term oil trend indicators, useful for only one day until they need to be recalculated.

The second method is to use these points to enter and exit the crude oil markets. This technical indicator is a useful tool that can be used to calculate the areas that are likely to cause oil price movement.

These points should be used conjunction with other forms of technical analysis such as Moving averages, MACD & stochastic oscillator.

This technical indicator can be used in many different ways. Here are a few of the most common techniques for utilizing them.

Oil Trading Trend Direction: Combined with other technical analysis techniques such as overbought/oversold oscillators, volatility measurements, the central point may be useful in determining the general trending direction of the market. Trades are only taken in the direction of the Oil Trading trend. Buy signal occurs only when the crude oil market is above the central pivot and sell oil signal occur only when the crude oil market is below the central pivot.

Oil Trading Price Breakouts: A bullish signal occurs when the crude oil market breaks up through the central pivot or one of the resistances (typically Resistance 1). A bearish signal occurs when the crude oil market breaks down through the central point or one of the supports (typically Support 1).

Oil Trading Trend Reversals:

• A buy oil signal occurs when the crude oil price moves towards a support level, gets very close to it, touches it, or moves only slightly through it, and then reverses and moves back in opposite direction.

• A sell oil signal occurs when the crude oil price moves towards a resistance level, gets very close to it, touches it, or moves only slightly through it, and then reverses and moves back in opposite direction.

Stop Loss and/or Limit Profit Values Determined by Support/Resistance: This technical indicator might be potentially helpful in determining suitable stoploss &/or limit profit placements. For example, if trading a long breakout above the Resistance 1 it may be reasonable to position a stoploss.

Combining with Moving Average Crossover System

A good indicator to combine and trade reversal oil trading signals is the moving average crossover which can be used to confirm the direction of a reversal oil signal.

An investor can then open an order once these 2 indicators give a trading signal in same direction.

Moving Average Crossover Technique

Moving average crossover method that can be combined with this indicator to come up with a trading system for generating buy and sell oil signals.

To download Pivot points:

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

Once you download it open it with MQL4 Language Editor, Then Compile it by pressing the Compile Button & it'll be added to your MT4.

Note: Once you add it to your MT4, the indicator has additional lines named Mid Points, to remove these additional lines open MQL4 Language MetaEditor(shortcut keyboard key - press F4), & change line 16 from:

Extern bool midpivots = true:

To

Extern bool midpivots = false:

Then Press Compile again, and it will then appear as exactly illustrated on this website.