Pivot Indicator
The Pivot Indicator for MT5 helps traders to identify reversal points and where to effectively place trades.
CATEGORIES: MT5, LEVELS
Updated on: 17.12.2023
Forex support and resistance levels are fundamental levels that all technical traders should understand. As important as these levels are, many technical traders, especially beginners, find them difficult to place.
The problem of precise placement of key support and resistance levels is solved using the Pivot indicator.
The Foundation
The Pivot indicator for MT5 shows the levels at which a price reversal can occur. It contains 7 horizontal levels on the chart, which are potential support and resistance levels where the price movement could change.
The levels are indicated 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 Pivot Indicator also plot mid points or intermediate levels between the pivot point and support and resistance zones.
Calculation of the Pivot 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).
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