Pivot High/Low Analysis & Forecast

This innovative trading indicator is designed to help traders by highlighting pivot points high/low, while also providing essential metrics such as the percentage change between consecutive pivots (Δ%) and the number of bars between the same type of pivots (Δt). Additionally, a trailing mean for each of these metrics is displayed on a convenient dashboard on your chart. For those looking to predict future movements, this indicator offers an estimation of the future time position of pivot points, making it an invaluable tool for descriptive analysis. Although this indicator isn't intended for real-time trades, it offers critical insights for strategic planning in conjunction with other analytical tools.

How to Trade with Pivot Points Indicator?

The Pivot Points Indicator is a powerful tool for predicting future price movements. By analyzing past pivot points, traders can gain insights into potential future pivot positions. It's important to note that each metric is relative to the same type of pivot points, providing consistency in your technical analysis. Many analysts use this data to construct patterns or to filter significant pivot points from the noise.

How to Use Forecast for Trading

The indicator uses the trailing mean of the distance between pivots to forecast the timing of future pivot points. This can be immensely helpful for traders trying to predict future market tops or bottoms. Forecasted pivot points are marked on the chart by vertical dashed lines, providing a clear visual aid. An example of successful forecasting is shown below:

In the example above, we observe forecasted pivots for BTCUSD15. Pay attention to how the proposed pivot high, marked by a blue dotted line, aligns with actual market behavior. This forecasting tool becomes even more beneficial when a new pivot high emerges and aligns perfectly with the earlier prediction.

Calculation of time positions for forecasts is shown below:

x1_ph + E[Δt] x1_pl + E[Δt]

In this equation, x1_ph stands for the most recent pivot high's position in time, x1_pl stands for the most recent pivot low's position in time, and E[Δt] symbolizes the average distance between respective pivot points.

Indicator Configuration Settings

Configuring the right settings in the Pivot Points Indicator enhances your trading strategy:

• Length: Sets the window size for detecting pivot points.
• Show Forecasted Pivots: Toggles the visibility of future pivot point forecasts.

Customizing the Dashboard

• Dashboard Location: Choose where to position the dashboard on your chart for optimal viewing.
• Dashboard Size: Adjusts the dashboard's size to fit your preference.
• Text/Frame Color: Customize the frame and text colors to match your chart theme.

FAQ

1. How do I access the Pivot Points trading indicator?

• You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.

2. Can I use this indicator for real-time trading?

• While the indicator provides valuable insights, it is primarily designed for descriptive analysis and strategic planning rather than real-time trading.

3. What does Δt represent in the calculations?

• Δt represents the distance in bars between pivot points of the same type.