Pivot Points

The Pivot Points indicator is a visual simulation tool designed to identify potential entry and exit levels based on historical high/low ranges and price action around pivot levels. It allows traders to track average entry prices and simulate pyramiding or dollar-cost averaging (DCA) strategies directly on the chart without executing live trades.

Usage

The indicator can be used as a standalone signaling tool or as a framework for testing position management logic.

• Entry Signals: Entry points are generated when the price interacts with a level derived from the pivot range (the distance between the highest high and lowest low over a lookback period).
• Position Simulation: The script simulates entries and tracks the average entry price. If the price continues to drop below a user-defined percentage, it can simulate additional DCA entries.
• Exit Signals: The tool generates an exit label once the price crosses the profit target, which is calculated based on the average entry price and the "Take Profit %" setting.
• Pivot Factor: Users can adjust the sensitivity of the entry level relative to the high/low range. A factor of 1 essentially uses the full range, while lower or negative values shift the entry threshold.

Details

The script identifies pivots by calculating the highest and lowest points over a specific lookback period (Pivot Length). To filter out extreme outliers, it uses a standard deviation check (ta.dev) against the pivot points; levels that deviate too significantly are ignored in favor of the previous stable pivot level.

The entry logic incorporates a Lookback Factor and a Pause Timer to prevent multiple entries on the same bar and to ensure signals are based on established price levels. The average entry price is updated dynamically using a internal function, simulating how a real-world position would behave when adding to a trade.

Settings

• Leverage: Defines the multiplier used for profit and DCA calculations, simulating the effect of leveraged trading.
• Take Profit %: The percentage gain required from the average entry price to trigger an exit signal.
• DCA when < %: The percentage drop from the last fill price required to trigger a dollar-cost averaging entry.
• Pivot Factor: A multiplier applied to the pivot range to determine the specific price level for entries.
• Pivot Length: The lookback window used to determine the highest highs and lowest lows.
• Lookback Factor: An additional multiplier used in the calculation of the signal trigger level.

FAQ

How do I use the Pivot Points indicator?

The indicator displays "ENTRY" and "EXIT" labels on the chart. You can monitor these to understand potential reversal zones or use the visual average entry price to manage simulated trades.

What is the "Pivot Factor" for?

The Pivot Factor determines where the entry level sits between the highest high and lowest low. Adjusting this allows you to fine-tune how deep of a retracement is required before a signal appears.

How can I access Pivot Points?

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