This version of the Pivot Point indicator allows traders to choose whether the indicator should plot the Daily, Weekly, or Monthly Pivot Points. The Support (S1, S2, and S3) and Resistance (R1, R2, and R3) lines have different formulas all of which are also derived from the main Pivot Point (PP) line. For example, a Daily Pivot Point would be the average of the high, low, and close of the previous day, while a Weekly Pivot Point would be the average of the high, low, and close of the previous week. It is usually the average of the high, low, and close of the prior period. This version of the Pivot Point indicator plots a dotted yellow line to represent the Pivot Point (PP) line, three dotted red lines to represent the Resistance lines (R1, R2, and R3), and three dotted blue lines to represent the Support lines (S1, S2, and S3).Īlthough there are several methods in computing for the Pivot Point lines, the middle line of the Pivot Point line is usually a basic computation. Pivot Point indicators then plot three Resistance lines (R1, R2, and R3) above the Pivot Point line, and three Support lines (S1, S2, and S3) below the Pivot Point line. The main line would be the Pivot Point (PP) line which would be the basis for the other lines. ![]() Pivot Point indicators generally plot seven lines. ![]() The Pivot Point indicator is a widely used technical indicator used to determine the general trend direction or bias based on the relationship of price action in relation to historical price data points. Using the Pivot Point indicator is an effective way to objectively identify support and resistance levels which many seasoned traders are most likely looking at. However, traders would often identify support and resistance levels manually, making it very subjective. Support and Resistance levels often work when the bulk of the market consider it as such. Introduction to the Pivot Point Indicator
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