Pivot Points Commodities Technical Analysis & Pivot Points Trading Signals
This commodity indicator consists of a central pivot which is surrounded by Three resistance levels below and Three support levels above.
Initially these points were used by floor traders to analyze & trade the equities & futures commodity markets. This commodity technical indicator is considered to be leading rather than lagging.
Pivots provide a quick way for commodities traders to analyze the general commodity trend of how the commodity market is going to be moving during the course of the day. A few simple calculations are used to plot the resistance and support levels.
To calculate these points for the coming trading day is the previous day's
- high,
- low, and
- close commodities prices are used
The commodities trading day closes at 5:00PM EST this daily market closing time is when the technical 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 & resistance levels as follows:
Resistance 3
Resistance 2
Resistance 1
Pivot Point
Support 1
Support 2
Support 3
Commodities Technical Analysis & Generating Trading Signals
This commodity indicator can be used in different ways to generate commodities signals. The following techniques are the most common technical analysis:
Commodities Trend Identification Signals
The central pivot is used by commodities traders to determine the general market commodity trend direction. The trades taken will only be in direction of the commodities trend.
- Buy signal - commodities price is above the central point
- Sell signal - commodities price is below the central point
Commodity Trading Price Breakout Signals
Commodities Price breakout trading signals are generated as follows
- Buy signal- is generated when the commodities price breaks upwards through the central point.
- Sell signal- is generated when the commodities price breaks-out downwards through the central point.
Commodity Price Break-out
Commodities Price Reversal Trading Signal
Commodities Price reversals are generated as follows
Buy Trading Signal- when commodities price moves down towards one of the support area, then touches the support or moves slightly through it then quickly reverses and moves upwards.
Sell Trading Signal- when commodities price moves up towards one of the resistance level, then touches the resistance or moves slightly through it then quickly reverses and moves downwards.
Commodities Price Reversal Trading Signal
Setting Stop-loss & Limit Profit Values
The central pivot and the other support and resistance levels are used by commodities 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, & the Support 1 can be set as the StopLoss Commodity Trading 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 MetaEditor, Then Compile the technical indicator by pressing the Compile Button Key & it will be added to your MetaTrader 4.
NB: Once you add it to your MetaTrader 4, the technical indicator has additional lines named Mid-Points, to remove the additional lines open MQL4 Meta Editor(shortcut key-board key - press F4), and change line 16 from:
Extern bool midpivots = true:
To
Extern bool midpivots = false:
Then Press Compile button again, & it will then appear as exactly illustrated on this site.
