Pivot Points Crude Oil Technical Analysis & Pivot Points Crude Trading Signals
This oil 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 oil markets. This oil technical indicator is considered to be leading rather than lagging.
Pivots provide a quick way for crude oil traders to analyze the general oil trend of how the oil 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 crude oil prices are used
The oil trading day closes & this daily closing time is when the 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
Oil Technical Analysis & How to Generate Crude Trading Signals
This oil indicator can be used in different ways to generate crude oil signals. The following techniques are the most common technical analysis:
Oil Trend Identification Signals
The central pivot is used by crude oil traders to determine the general market oil trend direction. The trades taken will only be in direction of the crude oil trend.
- Buy trading signal - price is above the central point
- Sell trading signal - price is below the central point
Oil Trading Price Breakout Signals
Oil Price breakout trading signals are generated as follows
- Buy signal- is generated when the crude oil price breaks upwards through the central point.
- Sell signal- is generated when the crude oil price breaks-out downwards through the central point.
Oil Price Break-out
Oil Price Reversal Trading Signal
Oil Price reversals are generated as follows
Buy Trading Signal- when crude oil 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 Crude Trading Signal- when crude oil price moves up towards one of the resistance level, then touches the resistance or moves slightly through it then quickly reverses and moves downwards.
Oil Price Reversal Trading Signal
Setting Stop-loss & Limit Profit Values
The central pivot and the other support and resistance levels are used by crude oil 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 a StopLoss Oil 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 Meta Editor, 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.
