- April 29, 2022
- Posted by: Forex Wiki Team
- Categories: Forex Trading System, Free Forex Indicators
Pivot Point Strategy Review
The Pivot Point Strategy In Forex Trading uses the most prominent calculation techniques to automatically generate crucial Pivot Levels in the MT4 terminal: Classical, Camarilla, Woodie, Fibonacci, and CPR.
For MT4, it's arguably one of the greatest Pivot indicators. It's also completely free and can be downloaded without having to register.
Category: Indicator
Platform: MT4
Currency Pair: All pairs
Trading Time: All sessions
⏳ Timeframe: All timeframe
⭐️ Grade: B / ★★★✩✩
Best Brokers List
The Pivot Point Strategy In Forex Trading works with any broker and any type of account, but we recommend our clients to use one of the top forex brokers listed below:
What are Pivot Points and How Do I Use Them?
Pivot Point Strategy In Forex Tradings has been based on the premise that the price is far more likely to reach yesterday's closure point than to transcend the prior day's range. As a result, the most often used computation period for Pivot Points is Daily.
All Pivot levels serve both support and resistance in this situation.
We may detect various price interactions with these levels while looking at the chart.
One of the Pivot Point Strategy In Forex Trading merits is its widespread use; the more traders who use the same instrument, the more likely the price will interact with it.
Calculation Modes and Formulas:
To calculate levels, HIGH (H), LOW (L), and CLOSE (C) data from the prior period, which is commonly a day, week, month, or hour, are employed.
The idea of RANGE (R) is also employed while computing Pivots.
The formula H-L is used to calculate its value.
PP – Pivot Point;
S1-S4 – Support levels;
R1-R4 – Resistance levels.
You should also take into account the distinctions between the Forex and stock markets.
Pivot levels were first utilized in the stock market, where the previous day's closing price is extremely important and has a considerable impact on traders' psychological behavior the following day. Forex, on the other hand, operates around the clock, thus the end of one trading day corresponds with the start of the next.
Fibonacci
The Fibonacci number theory is often employed in the Forex market. Pivot Points are no different. The levels of resistance and support are calculated using this approach by multiplying the range (R) by the relevant Fibonacci numbers.
Camarilla
Camarilla levels are substantially closer to the present price, therefore interactions with them happen a lot more frequently. This method is appropriate for people who engage in short-term trading.
Please notice that the PP calculation above differs from the widely used Camarilla approach. We've adjusted the calculation because the conventional method produces a level that doesn't match the logic of other support and resistance levels.
Woodie
This method is identical to the original one, except when computing the basic PP line, greater emphasis is placed on the period's closing price.
Classic (Floor)
Calculating Pivot Points with this approach is the most popular. The primary (blue) line serves as a crucial support/resistance level in this diagram.
Central Pivot Range (CPR)
It's a more advanced variant of the traditional Pivot Point calculations. This indication is unique in that it lacks the traditional support and resistance levels. Instead, the Central Pivot Range consists of three pivot lines: a central one, as well as upper and lower bounds.
CPR formula :
TC = (Pivot – BC) + Pivot
Pivot = (High + Low + Close)/3
BC = (High + Low)/2
Here we have:
TC – Top Central Pivot;
Pivot – Central Pivot;
BC – Bottom Central Pivot.
CPR aids a trader in predicting future market conditions by examining whether pivots are higher or lower over time, or if range breadth is narrowing or broadening.
If CPR is narrow for several days, for example, it typically suggests a large breakout or breakdown in the near future. Alternatively, if the market closes above the day's CPR, it might be a hint of optimistic tendencies for the next day.
Which of these approaches for calculating Pivot Point Strategy In Forex Trading is the most effective?
There is no such thing as the best or worst way. In truth, any of them can work, and you should choose one depending on your trading views.
Setting Of Pivot Point Strategy
The Pivot Point Strategy In Forex Trading is formatted as an "All In One" indication. As we tried our best to incorporate all of the most common functionalities in this MT4 indicator, you may adjust it to your liking.
If you have any specific requests or suggestions for improvements, please contact us and we will gladly consider them.
Calculation Method – Choose from the following methods for calculating Pivot Points: Classical, Camarilla, Woodie, and Fibonacci. Each method's formulae are explained above.
Calculation Period – It specifies the time frame during which the High, Low, and Close values will be calculated.
Available periods:
Monthly.
Weekly;
Daily;
Hourly;
Number of Periods to show. The number of preceding periods will be shown on the graph. If the option "Show only the current period" is selected, this parameter is ignored.
Show Only Recent Period. One or more computation periods are displayed.
Depth of Levels – The number of visible support and resistance lines on the chart is limited.
Right Shift – Continue the line to the right indent on the chart's full length.
Color Scheme – The color scheme for the indication is automatically detected. It's also possible to manually alter the backdrop color.
Download Pivot Point Strategy
We highly recommend trying Pivot Point Strategy In Forex Trading for at least a week with ICMarket demo account. Also, familiarize yourself with and understand how this system works before using it on a live account.
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