Daily Pivot Points Indicator

The daily Pivot Points Indicator for MT4 helps traders to identify reversal points and where to effectively place trades.

CATEGORIES: MT4, LEVELS
Updated on: 26.10.2023

Support and resistance levels in forex are the fundamental levels all technical traders must understand.

As important as these levels are, many technical traders, especially newbies, find it difficult to place.

The problem of placing key support and resistance levels accurately are achieved using the Daily Pivot Points Indicator.

The Foundation
The Daily Pivot Points Indicator for MT4 shows levels where price reversal can take place.

The Daily Pivot Points Indicator contains 13 horizontal levels on the chart. These levels are shown in the chart below.

These levels shown in the diagram above are potential support and resistance levels where price movement can change.

The levels are labeled in the diagram below.

From the diagram above, the R1, R2, and R3 are the first, second, and the third resistance levels respectively.

The S1, S2, and S3 are the first, second, and third support levels respectively.

The PP (yellow horizontal line) is the pivot point line, and it is seen between the resistance and the support zones.

The Daily Pivot Points Indicator also plot mid points or intermediate levels between the pivot point and support and resistance zones.

Calculation of the Daily Pivot Points Indicator are done using the previous trade session’s open, low, high and close.

The Pivot Point (PP) = (close + high + low)/3.

Other support and resistance levels are calculated from the Pivot Point.

First Resistance (R1) = (2 X PP) – Low.

Second Resistance (R2) = PP + (High – Low).

Third Resistance (R3) = High + 2 (PP – Low).

First Support (S1) = (2 X PP) – High.

Second Support (S2) = PP – (High – Low).

Third Support (S3) = Low – 2 (High – PP).

One of the advantages of using the Daily Pivot Points Indicator for MT4 is that it effectively helps technical traders place potential support and resistance zones.

Furthermore, unlike most subjective technical indicators, this indicator is objective – all traders use the same method for calculating it.

This indicator is especially useful to short-time traders (day traders) to take advantage of little price changes.

Forex experts and market makers also use this indicator to identify potential reversal points.