Pivot Indicator
Pivot indicator for MT4 provides daily pivot lines with Resistance 1, 2, 3 and Support 1, 2 and 3 lines to BUY and SELL.
Description
The Pivot indicator for MT4 plots the classic pivot lines on the price chart. The indicator plots the Pivot, Resistance 1, Resistance 2, Resistance 3, and Support 1, Support 2, and Support line on charts till the H4 price charts. So, forex traders can BUY or SELL at these important reversal points.
The indicator plots the support and resistance based on the previous day’s value and acts as a leading indicator since it draws the current day’s pivot points in advance. The indicator is best suited for new and advanced forex traders. New traders can use the pivots to locate entry points, stop loss and take profit points. However, advanced forex traders can use the lines in confluence with other technical indicators. Additionally, the indicator can be used for automated trading strategies.
The calculation of the classic Pivot lines is below.
Pivot Line = (High + Low + Close) / 3
R1, Resistance Line 1 = (2 x Pivot)- Low
R2, Resistance Line 2 = (Pivot – Support 1) + Resistance 1
R3, Resistance Line 3 = (Pivot-Support 2) + Resistance 2
S1, Support Line 1 = (2 x Pivot) – High
S2, Support Line 2= Pivot – (Resistance 1 – Support 1)
S3, Support line 3 = Pivot-( Resistance 2 – Support 2)
Pivot Indicator For MT4 Trading Signals
The above GBPUSD H1 price charts show the indicator for MT4 in action. The indicator plots the Pivot line in Orange, Support 1 and Support 2 in Dark Blue, Resistance 1 and Resistance 2 as Maroon and Support 3 and Resistance 3 as a green line.
Even though, the pivots have evolved into Demark Pivots, Fibonacci pivots and Camarilla pivots the classic pivot lines are widely used by global technical traders. The pivot points act as a potential reversal point. So, forex traders anticipate price reversal at these lines and formulate technical trading strategies accordingly.
If the price reaches Support 1 or Support 2 or Support 3 lines forex traders anticipate the prices to bounce from these lines and reverse their direction. However, a clear break of these lines will invalidate the reversal signals. So, forex traders should look for Bullish reversal price action and place a BUY trade. The best stop loss point is at the next lower support line or the previous swing low. On the other hand, traders can use Resistance 1 or Resistance 2, or Resistance 3 as profit targets.
Similarly, forex traders can anticipate the price to reverse its direction around Resistance 1, Resistance 2, or Resistance 3. So, technical traders can formulate trading strategies for a Bearish trade and enter the market with a SELL position. As the trader anticipates price reversal on the opposite pivot lines it’s prudent to book profits at the Support 1 or Support 2 or Support 3 lines. The best stop loss is above the previous swing high.
Conclusion
The Pivot indicator for MT4 puts the trader in line with the price reversal and take profit anticipation of most of the forex traders. Additionally, forex traders can download the indicator for free and install it easily.