Pivot Points are often used by professional traders as a predictive indicator of market movements. ActivTrades has developed this famous indicator for both MetaTrader 4 and MetaTrader 5 platforms, with 3 levels of Support and Resistance.
The lines displayed on the chart represent the Pivot Point (Orange) as well as Support and Resistance levels (Dark Blue, Maroon and Green). If the price is above the Pivot Point, the market is usually considered as bullish, whereas price below the Pivot Point is usually seen as a bearish market. Supports and resistances help determine potential reversals levels of the current market trend.
Pivot point (PP) = (High + Low + Close) / 3
Support and resistance levels are then calculated off the pivot point as follow:
First resistance (R1) = (2 x PP) – Low
First support (S1) = (2 x PP) – High
Second resistance (R2) = PP + (High – Low)
Second support (S2) = PP – (High – Low)
Third resistance (R3) = High + 2(PP – Low)
Third support (S3) = Low – 2(High – PP)
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The provision of Pivot Point Indicator should in no way be considered as investment advice from ActivTrades or any related party. The indicator is for information purposes only and should not be used as a basis for investment decisions. Please ensure that you fully understand the risks involved and seek independent advice if necessary.