Daily Pivot Points
Jun 29, 2020
The Daily Pivot Points indicator automatically calculates and plots daily support and resistance levels based on the previous day's trading range to help traders identify potential price reversal or breakout zones.
Usage
The tool is primarily used by intraday traders to gauge market sentiment and identify key horizontal levels where price action might stall or react.
- Pivot Point (PP): The central level that defines the overall daily trend. Trading above the PP suggests a bullish bias, while trading below suggests a bearish bias.
- Resistance Levels (R1-R4): These levels represent potential areas where selling pressure may increase.
- Support Levels (S1-S4): These levels represent potential areas where buying interest may emerge.
- Midpoints (MP): Secondary levels located between the primary pivot, support, and resistance lines, providing additional granularity for price targets or stop-loss placement.
Details
The indicator utilizes the standard Floor Pivot Point formula, sourcing data from the previous day's high, low, and close prices via a security call. It projects these levels onto the current trading day. The script includes automated alert functionality that triggers when the price crosses any of the major pivot or support/resistance lines.
Settings
The script does not feature external input parameters for the calculation logic, as it follows a standard mathematical model:
- Pivot Point (PP): Calculated as (High + Low + Close) / 3.
- Resistance 1 (R1): (2 * PP) - Low.
- Support 1 (S1): (2 * PP) - High.
- Extended Levels (R2-R4, S2-S4): Calculated based on the previous day's range (High - Low) added to or subtracted from the Pivot Point.
- Midpoints (MP): Calculated as the arithmetic mean between two adjacent primary levels.
FAQ
How do I use the Daily Pivot Points in my strategy?
Traders often use these levels to set profit targets or identify entries. For example, a bounce off S1 during a bullish day might be considered a buying opportunity, while R1 might serve as a first target.
Does this indicator repain?
No, the levels are calculated using the previous day's data and remain static throughout the current trading day.
How can I access this tool?
You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.
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