Pivot Points Indicator For MT4

Pivot Points Indicator For MT4

Table Of Contents:

  1. Pivot Points Indicator For MT4
  2. Trading ideas with the Pivot Points Indicator For MT4
  3. What is a support?
  4. What is a resistance?
  5. What is the pivot?
  6. Pivot Points Indicator For MT4 - Buy Entries
  7. Pivot Points Indicator For MT4 - Sell Entries
  8. Pivot Points Indicator For MT4 - Conclusion

The Pivot Points Indicator For MT4 is an indicator which uses the highs, lows, closing and opening prices to form and paint Pivot Points on your trading platform in Metatrader 4. Those of you who serious traders and who wish to take your trading to the next level then Pivot Points is a key component to help you refine whatever successful trading system you might already have. Pivot Points are pivotal in your trading because it helps you to identify strong levels of resistance and support levels which you may trade off for trend continuation patterns or even reversal patterns; the market adheres to these Pivot Point levels more often than you might think and what is also beneficial about this is that you do not have to spend time drawing inaccurate resistance and support levels by yourself (the indicator does it for you).

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Trading ideas with the Pivot Points Indicator For MT4


The Pivot Points Indicator For MT4 is a special type of Pivot point indicator designed to make it easy for traders including beginners to benefit from forex pivot points trading strategy.

As evident in the above screenshot, the indicator is programmed to plot daily support and resistance levels to assist you in determining how the market swings. It is important to however note that the pivot points are calculated based on the data history. Therefore, it only gives an overview of how you can expect the market to behave depending on how it behaved earlier.


What is a support?


The market prices of any asset in the forex market move in swings. There are times when the market prices are in a bullish (upward) trend and there are other times when they are in a bearish (downward) trend. And the points at which the market prices turn from bullish to bearish and vice versa are referred to as the support and resistance levels depending on how the market direction changes at the points.

The level at which the market price changes from a downward trend to an upward trend is referred to as a support level. The prices may not bounce back upwards every time at that specific level but at least once or twice.

The Pivot Points Indicator For MT4 plots support levels based on how the market prices bounced back upwards using the data from the Daily timeframe. Therefore, the supports show the daily levels at which market prices bounced back upwards.

The support levels plotted by the Pivot Points Indicator For MT4 are green in colour and always above the current market price. You will notice they are arranged in order of Support 1 Day, Support 2 Day, and Support 3 Day. This shows the supports for the previous days in that order with the support 1 day being the support level for yesterday.

There is also a dotted red line that is just below the market price that is labelled Support. This line shows the intra-day Support level.


What is a resistance?


The level at which the market price changes from an upward trend to a downward trend is referred to as a resistance level. The prices may not bounce back upwards every time at that specific level but at least once or twice.

The Pivot Points Indicator For MT4 plots resistance levels based on how the market prices bounced back downwards using the data from the Daily timeframe. Therefore, the resistance levels show the daily levels at which market prices bounced back downwards.

The support levels plotted by the Pivot Points Indicator For MT4 are red in colour and always below the current market price. You will notice they are arranged in order of Resistance 1 Day, Resistance 2 Day, and Resistance 3 Day. This shows the Resistance levels for the previous days in that order with the Resistance 1 Day being the Resistance level for yesterday.

There is also a dotted red line that is just below the market price that is labelled Resistance. This line shows the intraday Resistance level.


What is the pivot?


It is also evident that there is also another line that is plotted between the support and resistance levels that is maroon and it is labelled Pivot Day.

Pivot Day is usually the midpoint between the resistance and support level. It is referred to as Pivot just as in the case of a seesaw; it has to have a pivoting point from where it swings.

If the current market price is above the pivot point, it is an indication that the market is in a bullish trend and when the current market price is below the pivot point it is an indication the market is in a strong bearish trend.

And just like in the case of the Support and Resistance levels, there is also a dotted maroon line which shows the intraday pivot point level.


Pivot Points Indicator For MT4 - Buy Entries


To open BUY potions using the Pivot Points Indicator For MT4, you should wait for the current market price to get above the Pivot Day level if you day trading. However, if you are looking to place a short term trade, you can open a BUY position when the current market price gets above the dotted Pivot level line.

You must, however, wait for the indicator to also indicate “Up Trend” at the top right corner of the chart.

You should however avoid placing a buy order when the market has just bounced back after approaching the resistance level even though the indicator says Up Trend. In most cases when the market bounces back after approaching the resistance level, it indicates that the market could turn bearish and you should wait to see if it bounced back upwards after hitting or approaching the Pivot level to indicate a bullish trend or it will go below the pivot level to indicate a bearish trend.

Once you open the BUY position, you should anticipate the market trend to change to bearish once the prices approach the resistance level. Although it is not always the case and the prices may decide to break through the resistance level, in which case you should target the next resistance level above the previous.

If you are working with stop levels, you should place your take profit just below the Resistance 1 Day level and the stop loss just below the Pivot level.

With the support and resistance levels, it is also possible to use trailing stop loss levels with the support levels being the targets.




Pivot Points Indicator For MT4 - Sell Entries


To open SELL potions using the Pivot Points Indicator For MT4, you should wait for the current market price to get below the Pivot Day level if you day trading. However, if you are looking to place a short term trade, you can open a SELL position when the current market price gets below the dotted Pivot level line.

You must, however, wait for the indicator to also indicate “Down Trend” at the bottom right corner of the chart.

You should however avoid placing a sell order when the market has just bounced back after approaching the support level even though the indicator says Down Trend. In most cases when the market bounces back after approaching the support level, it indicates that the market could turn bullish and you should wait to see if it bounced back downwards after hitting or approaching the Pivot level to indicate a bearish trend or it will go above the pivot level to indicate a bullish trend.



Once you open the SELL position, you should anticipate the market trend to change to bullish once the prices approach the support level. However, it is not always the case and the prices may decide to break through the support level, in which case you should target the next support level below the previous.

If you are working with stop levels, you should place your take profit just above the Support 1 Day level and the stop loss just above the Pivot level.

With the support and resistance levels, it is also possible to use trailing stop loss levels with the Resistance levels being the targets.


Pivot Points Indicator For MT4 - Conclusion


With the Pivot Points Indicator For MT4, traders can comfortably open and close trades without depending on other trend indicators.

But it can also be used in combination with other indicators like those indicators that show when the market is in an overbought or oversold condition to help traders identify when to open positions and when not to open positions even though the Pivot Points Indicator For MT4 shows all conditions are ‘go’ to open a potion.

 

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