# MT4 Pivot Point Indicator

Welcome again to the **best mt4 indicators** website! Every forex trader that wants to make a profit from the market should be able to determine when the market is bullish or bearish. Otherwise, using the wrong knowledge to enter a trade could be the easiest way to lose your hard-earned money.

You may not be a professional in understanding price movements, but with some fantastic indicators, you can easily read the market even if you are not tech-savvy. Therefore, one of those highly helpful tools is the **MT4 Pivot Point Indicator**.

With this indicator, it is easy to read price movements to be able to plan the right strategy for trading. This post will show you what a pivot point is, how to calculate pivot points, and how to install the indicator.

**What is a pivot point?**

A pivot point is a price level that a professional trader uses to evaluate whether market prices are bullish or bearish. It helps the trader in deciding the movement of prices in the financial markets. Pivot points stand for the averages for the highs, lows, and closing prices that take place inside a trading session or a trading day.

A pivot point can also be seen as an area of possible support or resistance where price may ‘pivot’ or alter its course. Pivot points are a form of **forex indicators** used for technical analysis, which presents the foundation for establishing market trends. To pivot is to turn. A set calculation is used in forming pivot points.

**Uses of Pivot Points**

Pivot points have many applications, amongst which are:

**1. Decide market trends**

Traders make use of pivot points in deciding market trends, based on the price action direction. A bearish market exists when price action stays or drops beneath the pivot level.

Conversely, a mulish market exists when the price action stays or crosses over the pivot level.

**2. Enter and exit the market**

The pivot point also helps the trader in determining when to enter or exit the market. For instance, a trader can set a stop-loss close to any of the recognized support or resistance levels.

**Types of Pivot Points**

There are various types of pivot analysis. In this post, we will take a look at the calculation methods behind some of these types – Fibonacci Pivot Points, Standard Pivot Points, DeMark Pivot Points, and Woodie’s Pivot Points.

**1. Standard Pivot Points**

The starting calculation for the Standard Pivot Point formula is the arithmetic mean of the high (H), the low (L), and the close (C) from the preceding period. We refer to this as our base pivot point, P.

• P = (H + L + C)/3

Next, we obtain two support and resistance levels from P. We will refer to the difference between the high and low D, i.e. D = H – L

1. S1 =2P – H (First support)

2. S2 = P – D (Second support)

3. R1 = 2P – L (First resistance)

4. R2 = P + D (Second resistance)

**2. Fibonacci Pivot Points**

We go-ahead from the same starting point as above, which needs calculating P, the base pivot point. You plot the support and resistance levels a certain distance away from this point P, the base pivot point. We will call this D – the difference between high and low.

You subtract multiples of D from P to arrive at the support levels. Add multiples of D to P to get the Resistance levels. Get the multiples from the Fibonacci sequence of numbers.

**Here are the precise calculations:**

S1 = P – 0.382D

S2 = P – 0.618D

S3 = P – D

R1 = P + 0.382D

R2 = P + 0.618D

R3 = P + D

**3. DeMark Pivot Points**

There are three diverse methods of calculating the base pivot with DeMark Pivot Points. We make use of a different base pivot point definition. You have to choose your calculation based on how the close and the open compare. We will define a variable x, whose value depends on whether the open is higher or lower than the close.

1. If the close is inferior to the open: x = H + 2L + C

2. If the close is above the open: x = 2H + L + C

3. If the open equals the close: x = H + L +2C

This concluding value will be the one frequently used if what we are looking at is a Forex Pivot Point trading strategy. This is because the open is almost always equal to the close since the FX is a 24-hour market. The close and open are actually just conventions when it comes to a daily chart throughout the week. This is different from the stock market, where the open and close are different things divided by time and price.

The known value for x can be used in calculating the base pivot point P:

• P = x/4

You can as well calculate the support and resistance levels from x (DeMark pivot points do not make do with more than one support and resistance level)

• R1 = x/2 – H

• S2 = x/2 – L

**How to Calculate Forex Pivot Points**

To calculate pivot points, the following calculation is used:

• PP (pivot point) = (High + Low + Close)/3

In the chart below, apart from the point, the support and resistance levels are also added. You calculate them by:

• First resistance level = (2 x PP) – Low

• First support level = (2x PP) – High

You can create further support and resistance levels with the calculation:

• Second resistance level = PP + (High – Low)

• Second support level = PP – (High – Low)

**How to Install the MT4 Pivot Point Indicator**

Installing the **MT4 Pivot Point Indicator** is quite easy. Here are the steps to take:

1. Download the indicator.

2. Locate the Pivot Point indicator file(s) and copy the file(s)

3. Open Data Folder in MT4.

4. In the new window that opens, click to open the MQL4.

5. Open the “Indicators” folder.

6. Paste the copied file(s) from step 2 into the folder.

7. Restart your MT4 platform.

8. A pop-up window comes on. Click Ok.

And, you are done with the installation.

**Importance of pivot points to day traders**

Day traders love to use the pivot analysis most of the times, instead of other technical indicators. Here are some reasons why **MT4 pivot point indicator** is essential to Day traders:

**1. Ease of use**

A pivot point indicator is a tool that is easy to use; hence it has been integrated into the majority trading platforms. The platforms work out support and resistance levels automatically, thereby saving the trader the time that would have been used in doing it manually. It is left for the trader to fathom their approach to the market of the day after obtaining the pivot levels.

**2. High accuracy**

The pivot point is one of the most accurate indicators available. Therefore, it is highly reliable for day traders to decide trade entry or exit points. It makes it easy for traders to follow the overall flow of the market because it relies on the trading action of the previous day in forecasting the possible actions of the current day.

**3. Short time frames**

The pivot point derives data from a single day of trading. It forecasts likely the support and resistance levels using the high, low and close prices of the previous day. One can calculate pivots for shorter time frames, such as 30-minute charts, even though it is mainly used on the daily time frame.

**Conclusion For Mt4 Pivot Point Indicator**

**MT4 Pivot Point Indicator** is a tool day traders will always find handy because of its usefulness in predicting the market with high precision. Besides that, the indicator helps in deciding when to enter or exit the market. Here on our Best MT4 Indicators website we do mostly indicator reviews.

Furthermore, there are other amazing indicators and tools you can find on this platform. If you are really keen on trading without encountering many losses, then try our tools to see how they can assist you through this link. Next week we are going to publish a hull moving average MT4 article! Stay tuned.

And don’t forget to leave your comments below on your experience using Pivot Point Indicator.