How to Use Pivots Points for Day Trading

Pivot Points are used by stock traders to find support & resistance areas based on the previous day's stock price action.

This stock indicator is a very helpful and useful tool which uses the previous bars' highs, lows & closings to project support & resistance levels for future bars.

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

Daily pivots point levels are calculated from the previous day's high, low, close

This stock indicator is displayed and shown below

How Do I Use Pivot Points in Indices Trade?

Analysis in Indices Trade

The center pivot point itself is the primary level, which is used to identify the market trend

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

This stock indicator can be used in two ways

The first way is for determining overall trend: if the pivot point is broken in an upwards movement, then the stock trading market is bullish, & vice versa. However, pivot levels are shortterm trend technical indicators, helpful for only one day until they need to be recalculated.

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

These points and levels should be used in conjunction with other forms of trading analysis such as and like Moving averages, MACD and stochastic oscillator indicator.

This stock indicator can be utilized in many different ways. Here are a couple of the most often techniques for utilizing them.

Trend Direction: Combined with other trading analysis methods such as oversold/over-bought oscillators, volatility measurements, the central point may be helpful and useful in determining the general and overall trending direction of the price. Trades are only opened in direction of trend. Buy signal occurs only when the stock trading market is above the center pivot point & sell stock signal occur only when the stock trading market is below the center pivot points.

Price Breakouts: A bullish trading signal occurs when the stock trading market breaks up through the center pivot point or one of the resistances (commonly Resistance Zone 1). A bearish trading signal occurs when the stock trading market breaks down through the center point or one of the supports (typically Support Zone 1).

Trend Reversals:

A buy signal forms when the stock trading price moves towards a support zone, gets very close to this point, touches this point, or only moves slightly through this level, & then reverses & moves back in the in the opposite trend market trend trend market trend trend market trend trend trend direction.

A sell stock signal forms when the stock trading price moves towards a resistance level, gets very close to this point, touches this point, or only moves slightly through this level, & then reverses & moves back in the in the opposite trend market trend trend market trend trend market trend trend direction.

Stop Loss &/or Limit Profit Values Determined by Support/Resistance: This stock indicator might be potentially helpful in determining suitable stoploss &/or limit profit placements. For examples, if trading a long breakout above the Resistance 1 it might be practical to position a stop loss order.

Combining with Moving Average Cross-Over System

A good indicator to combine and trade reversal signals is the MA cross over which can be used to confirm the direction of a reversal trade signal.

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

MA Crossover Strategy with Pivot Point Indicator

Moving Average Cross-over Technique

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

To download Pivot points Indicator:

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

Once you download the trading indicator. Open it with the MQ4 Language Meta Editor, Then Compile the indicator by pressing the Compile Button & it'll be added to your MT4.

NB: Once you as a trader add it to your MT4, the trading indicator has additional lines named MidPoints, to remove the additional lines open MQ4 Meta Editor(short cut keyboard key - press F4), and change line 16 from:

Extern bool midpivot = true:

Extern bool midpivot = false:

Then Press Compile again, & the indicator will then be shown as illustrated on this website.

More Lessons:

Trade Stock Indices

How to Use Pivots Points for Day Trading

Analysis in Indices Trade

Combining with Moving Average Cross-Over System