How to Use Pivots Points for Day Trading

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

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

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

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

This stocks indicator is shown below

Technical Analysis in Stocks Trading

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

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

This stocks indicator can be used in two ways

The first way is for determining overall Stocks trend: if the pivot point is broken in an upward movement, then the stocks market is bullish, and vice versa. However, pivot levels are short-term stocks 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 stocks markets. This stocks indicator is a useful tool that can be used to calculate the areas that are likely to cause stocks price movement.

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

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

Stocks 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 stock market. Trades are only taken in the direction of the Stocks trend. Buy signal occurs only when the stocks market is above the central pivot and sell signal occur only when the stocks market is below the central pivot.

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

Stocks Trend Reversals:

• A buy signal occurs when the 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 the opposite direction.

• A sell signal occurs when the 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 the opposite direction.

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

Combining with Moving Average Crossover System

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

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

Moving Average Crossover Method

Moving average crossover method that can be combined with this indicator to come up with a stocks system for generating buy and sell 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 and it will be added to your MT4.

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

extern bool midpivots = true;

to

extern bool midpivots = false;

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