The DailyPivot Points indicator helps to compose a picture of market future movements, in distinct from the other tools that hang behind the market.
The information that became availble in the course of the previous day is used to calculate the check points of the minor trend of the current day.
Pivot Point (PP) is the equilibrium point – a level the price is attracted to throughout the day. Having three values for the previous day: maximum, minimum and close price, 13 levels for smaller timeframes are calculated: equilibrium point, 6 resistance levels and 6 support levels. This levels are called check points.
The check points provide the possibilty of easy determining the direction of the minor trend. Three values are most important – levels of equilibrium point, Resistance1 (RES1.0) and Support1 (SUP1.0). The pauses in the movement, or even a roll-back, are frequently seen during the moving of the price betweeen these values.
In such a way, the DailyPivot Points indicator:
- forecasts the range of prices variation;
- demonstrates the possible price stops;
- demonstrates the possible points of changing the direction of price movement.
If the market on the current day opens above the equilibrium point, then it is the signal for opening long positions. If the market opens below the equilibrium point, then the current day is favourable for opening short positions.
The method of check points consists in the monitoring the possibility of turning and breakthrough when the price collides with the resistance level RES1.0 or with the support level SUP1.0. By the time when the price reaches the RES2.0, RES3.0 or SUP2.0, SUP3.0 levels, the market appears to be overbought or oversold as a rule, so these levels are mostly used as the exit levels.
This indicator was first implemented in MQL4 and published in Code Base at mql4.com 23.12.2005.
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