Trade Stock Indices

Pivot Points Indices Technical Analysis and Pivot Points Indices Trading Signals

This stock indices indicator consists of a central pivot which is surrounded by 3 resistance levels below and 3 support levels above.

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

Pivots provide a quick way for stock indices traders to analyze the general indices trend of how the stock indices trading market is going to be moving during the course of the day. A few simple calculations are used to draw the resistance and support levels.

To calculate these points for the coming trading day is the previous day's

• high,
• low, and
• close indices prices are used

The stock indices trading day closes and this daily closing time is when the indicator is updated.

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

Resistance 3

Resistance 2

Resistance 1

Pivot Point

Support 1

Support 2

Support 3

Indices Technical Analysis and Generating Indices Trading Signals

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

Indices Trend Identification Signals

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

• Buy signal - stock indices price is above the central point
• Sell signal - stock indices price is below the central point

Indices Price Breakout Signals

Indices Price breakout signals are generated as follows

• Buy signal- is generated when the stock indices price breaks upwards through the central point.
• Sell signal- is generated when the stock indices price breaks downwards through the central point.

Indices Price Breakout

Indices Price Reversal Indices Trading Signal

Indices Price reversals are generated as follows

Buy signal- when stock indices price moves down towards one of the support level, then touches the support or moves slightly through it then quickly reverses and moves upwards.

Sell signal- when stock indices price moves up towards one of the resistance level, then touches the resistance or moves slightly through it then quickly reverses and moves downwards.

Indices Price Reversal Indices Trading Signal

Setting Stop loss and Limit Profit Values

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

Setting Stop loss and 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 the Stop Loss Indices Order Level for the trade.

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 MetaTrader 4.

NB: Once you add it to your MetaTrader 4, 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.