Pivot Points MT4 Stock Indexes Indicator and Pivot Points Indices Trading Signals
Pivot points consist of a central pivot level surrounded by three support levels below it and three resistance levels above it. This indicator originally used by floor traders on equity and futures exchanges because they provided a quick way for those traders to get a general idea of how the stock indexes trading market was moving during the course of the day using only a few simple calculations. However, over time these levels have also proved exceptionally useful in other markets as well.
One of the reasons that makes this indicator is now so popular is because they are considered a "leading" (or predictive) indicator rather than lagging. All that is required to calculate the levels for the upcoming (current) trading day is the previous day high, low, and close indices prices. These levels are calculated according to the following formulas:
The central pivot can then be used to calculate the support and resistance levels as follows:
Pivot points can be used in many different ways. Here are a few of the most common methods for utilizing them.
Indices Trend Direction:
Combined with other MT4 Indices Indicator techniques such as overbought/oversold MT4 Stock Indexes Indicators, volatility measurements, etc., the central pivot may be useful in determining the general trending direction of the stock indexes trading market. Trades are only taken in the direction of the trend. Buy trades occur only when the stock indexes price is above the central point and sell stock indexes trades occur only when the stock indexes price is below the central point.
Indices Price Breakouts:
When trading stock indexes price breakouts, a buy stock indices signal occurs when the stock indexes price breaks up through the central pivot or one of the resistance levels (typically Resistance 1). A sell stock indices signal occurs when stock indexes price breaks down through the central pivot or one of the support levels (typically Support 1).
Indices Price Reversals:
When trading stock indexes price reversals, a buy stock indices signal occurs when the stock indexes 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 stock indices signal occurs when the stock indexes 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 Limit Profit Values Determined by Support/Resistance Levels:
The central pivot and its support and resistance levels 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 level it may be reasonable to position a stop loss indices trading order just below the central point and one or more limit profit(s) orders at the Resistance 2 and/or Resistance 3 levels.
To download Pivot points:
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;
extern bool midpivots = false;
Then Press Compile again, and it will then appear as exactly shown on www.tradestockindices.com website.