Gold Trading Pivot Points

Pivot points is a set of indicators created by floor traders in the commodities markets to ascertain potential turning points, also known as 'pivots'. These points are calculated to determine levels in which the sentiment of the gold trend could change from 'bullish' to 'bearish.' Gold traders use these points as markers of support & resistance.

These points are calculated as the average of the high, low and close from the previous session:

Gold Pivot Point = (High + Low + Close) / 3

Day traders use the calculated pivot-points to determine the levels of entry, stops & profit taking, by trying to determine where the majority of other gold traders may be doing the same.

A pivot-point is a xauusd price level of significance in technical analysis of a financial market that is used by traders as a predictive indicator of xauusd price movement. It is calculated as an average of significant xauusd prices (high, low and close) from the performance of a market in the prior trading period. If the xauusd prices in the following period trades above the central point it's usually evaluated as a bullish sentiment, whereas if xauusd price below the central point is seen as bearish.

The central point is used to calculate additional levels of support & resistance, below and above central point, respectively, by either subtracting or adding xauusd price differentials calculated from previous trading ranges.

A pivot & the associated support and resistance levels are often turning points for the direction of xauusd price movement in a market.

• In an up gold trend, the pivot-point & the resistance levels may represent a ceiling level for the xauusd price. If xauusd price goes above this level the up gold trend is no longer sustainable and a gold trend reversal may occur.

• In a down gold trend , a pivot-point & the support levels may represent a low for xauusd price level or a resistance to further decline.

The central pivot-point can then be used to calculate the support and resistance levels as follows:

Pivot points consist of a central point level surrounded by three support levels below it and three resistance levels above it. These points were 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 xauusd market was moving during the course of the day using only a few simple calculations. However, over time they have also proved exceptionally useful in other markets as well.

One of the reasons they are now so popular is because they are considered a 'leading' (or predictive) technical indicator rather than a lagging indicator. All that is required to calculate the pivot points for the upcoming (current) day is the previous day high, low, and close xauusd prices. The 24-hour cycle pivot points in this indicator are calculated according to the following formulas:

Central pivot can then be used to calculate the support & resistance levels as follows:

Resistance 3

Resistance 2

Resistance 1

Pivot Point

Support 1

Support 2

Support 3

Pivot Points Support & Resistance Levels

Pivot Points as a XAUUSD Trading tool

The pivot point itself represents a level of highest resistance or support, depending on the overall sentiment. If the xauusd market is direction-less ( range bound ) xauusd prices will often fluctuate greatly around this level until a xauusd price breakout develops. Gold Prices above or below the central point indicates the overall sentiment as bullish or bearish respectively. This gold indicator is a leading XAUUSD indicator that provides signals of potentially new highs or lows within a given chart time frame.

The support and resistance levels calculated from the central pivot-point & the previous market width may be used as exit points of the open Gold trades, but are rarely used as entry signals. For examples, if the xauusd price is up-trending and breaks through the pivot point, the first or second resistance level is often a good target to close a position, as the probability of resistance and reversal increases greatly, with every resistance level.

In pivot point analysis three levels are oftenly recognized above and below the central point. These are calculated from the range of xauusd price movement in the previous trading period and then added to the central point for resistances & subtracted from it for support levels.

Pivot Points

Pivot levels can be used in many different ways. Here are a few of the most common techniques for utilizing them:

Gold Trend Direction: Combined with other Gold analysis techniques such as overbought/oversold oscillators, volatility measurements, etc., the central point may be useful in determining the general trending direction of the market. Trades are only taken in the direction of the Gold trend. Buy trades occur only when the price is above the central point and sell xauusd trades occur only when the price is below the central pivot.

Gold Price Breakouts: In xauusd price breakouts, a bullish buy signal occurs when the price breaks up through the central point or one of the resistance levels (typically Resistance 1). A short sell signal occurs when price breaks down through the central point or one of the support levels (typically Support 1).

Gold Trend Reversals: In gold trend reversals, a buy signal occurs when the price moves towards a support level, gets very close to it, touches it, or moves only slightly through it, and then reverses and starts moving in the other direction.

To download Pivot points:

https://c.mql5.com/21/9/pro4x_pivot_lines.mq4

Once you download it open it with MQL4 Language Meta Editor, Then Compile the technical indicator by pressing the Compile Button Key & it'll be added to your MetaTrader 4.

NB: Once you add it to your MT4, technical indicator has additional lines named Mid Points, to remove these additional lines open MQL4 Language Meta Editor(shortcut keyboard 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 www.tradegoldtrading.com web site.