The Pivot Indicator for MetaTrader 5 is an essential tool for traders looking to identify key Support And Resistance zones objectively. By calculating pivot points based on the previous session’s open, high, low, and close, this indicator helps both range and breakout traders make informed decisions while reducing guesswork.
Whether you’re a day trader or a swing trader, the Pivot Indicator provides clear price levels where reversals, breakouts, or continuation moves are likely to occur.
How the Pivot Indicator Works
The indicator plots 7 horizontal levels on the chart:
Pivot Point (PP, yellow line): The central reference level, calculated as:
PP=(High+Low+Close)3PP = \frac{(High + Low + Close)}{3}PP=3(High+Low+Close)
- Resistance levels:
- R1 = (2 × PP) – Low
- R2 = PP + (High – Low)
- R3 = High + 2 × (PP – Low)
- Support levels:
- S1 = (2 × PP) – High
- S2 = PP – (High – Low)
- S3 = Low – 2 × (High – PP)
Intermediate midpoints between PP and support/resistance levels are also plotted, providing additional guidance for trade management.
Benefits of the Pivot Indicator
- Objective analysis: Unlike subjective manual placement, all traders use the same calculation method.
- Supports multiple strategies:
- Range traders: Use S1–S3 as potential buy zones and R1–R3 as sell zones.
- Breakout traders: Watch for price breaking R1–R3 or S1–S3 to signal bullish or bearish momentum.
- Trade management: Use levels as take profit or stop loss references.
- Timeframe versatility: Especially effective for short-term (intraday) trading, but useful across all timeframes.
How to Use Pivot Points Effectively
- Combine with candlestick patterns to validate entry and exit points.
- Align with Trend Confirmation indicators like RSI or MACD for higher accuracy.
- Monitor higher-timeframe trends to filter false breakouts and identify strong directional moves.
Conclusion
The Pivot Indicator for MT5 simplifies identifying support, resistance, and pivot points while enhancing trading precision. It works for both range and breakout strategies and can also serve as stop loss and take profit reference levels. By integrating it with other technical indicators, traders gain a clear and objective method to improve trade timing, risk management, and overall decision-making in Forex markets.
