Hi good People,
I am brand new and I really need a hand on pivot point calculation and plotting on platform.
I understand the theory but I do not know how to figure out the variables, the open,high, low and close.
I assume the open prize is derived from the first candle of the previous day,
the high from the highest bullish swing and the low from the lowest bullish swing while the close is from the last candle of the previous day.
The point is that all these candles have their respective open,high,low and close prizes which makes me uncertain of the acceptable values.
I will be glad if anybody can tell me which is which and how to place the resistance and support values derived on MT4 trading platform.
I am also open to recommendation of automatic software that can chart and plot pivot point. Thanks all!
Pivot points — like Fibonacci retracement levels, and all other support and resistance levels — have value because (and ONLY because) a significant number of traders give them credence, and trade accordingly. In other words, they serve as useful predictors only because they are self-fulfilling prophesies.
In theory, pivot points are equally reliable on any time-frame. In practice, the daily time-frame which begins and ends at 5pm New York time is the one which works, for a couple of reasons. First, the lowest trading volume of the 24-hour forex trading day typically occurs around 5pm New York time, making that time the logical choice for rolling into a new forex “day”. Second, and even more important, [B]most traders BELIEVE that the 5pm-5pm New York time frame is the one that will work.[/B] That is, pivot levels derived from the 5pm-5pm New York day are the ones which become (to some extent) self-fulfilling prophesies.
If your trading platform and charting package happen to open and close daily candles at 5pm New York time, then “yesterday’s” daily candle is all you need in order to determine pivot levels for “today”. Yesterday’s open, high, low and close can all be read directly from that candle.
If you use MT4, your “day” probably begins and ends at 00:00 GMT (London time) or at 00:00 CET (European time). My opinion is that daily O-H-L-C based on either of these MT4 time frames are not as reliable as those based on 5pm-5pm EST. But, other traders might argue just the opposite.
Deriving pivot levels from your MT4 platform based on midnight GMT, or midnight CET, is easy. Deriving pivot levels from your MT4 platform, based on 5pm EST, is a nuisance. You will have to make your own decision about which to use.
If your platform cannot calculate the pivot levels you choose to use, then you will have to gather the appropriate O, H, L, and C, and run those data through a Pivot Point Calculator (there are several available online), and then plot the results graphically on your chart.
A perfect trading platform (in my opinion) would do the following. It would give you a choice of PP formulas (there are several);
it would let you choose how many S and R levels you want; it would let you include intermediate S&R levels (S-0.5, S-1.5, … R-0.5, R-1.5, etc.) if you so choose; it would calculate pivot levels for any time-frame you choose beginning and ending at any time you specify; and it would plot your selected pivot levels on your chart together with price labels. Finally, it would allow you to export your pivot levels from one time-frame to another. In other words, you could generate pivot levels on your Daily chart, and then export those pivot levels to your 1-hour chart (or any other chart of the same pair). I have never heard of a platform or charting package that can do all that.
Here are two posts (from the same thread) from a previous discussion of pivot levels which you might find useful:
I’m not sure what your next step was. You said you could not plot these pivot levels.
With my FXCM platform, I have only two choices: (1) use the primitive PP indicator built into the MarketScope charting package, or (2) do my own calculations and plot the results in the same way that I would plot any support and resistance levels.
Here are examples of (1) and (2):
This chart shows the built-in pivot point indicator. The indicator displays only the lines. I added the labels (R3, R2, etc.). This indicator cannot be adjusted in any way, except line color. In order to find the price corresponding to each level, the cursor has to be placed on the line, and the price read from the right-hand axis. The DAILY pivot levels cannot be exported to any other time-frame chart. (They can be plotted manually on any other time-frame chart.)
On the second chart, I have plotted the pivot levels calculated by the Pivot Point Calculator, using the built-in “Line” feature. Again, I have added the labels. Price labels could also be added manually. These lines could be plotted on the Daily chart, as shown, or on any other time-frame chart.
Hi Clint,
I actually wanted you to show me the values of the high, low and close and the results of your calculation from your platform so that I can compare and see if I extracted the right values.
After my calculation, I proceeded to plot in my values manually.While the pivot point and the resistance were able to fit into my y-axis,only my S1 could fit in because my y-axis ended a little below that.I had ADX indicator and tried as I could, I could not extend my -y axis further down to accommodate all my support levels.
I wonder if you can offer an explanation for that and as always I will be deeply grateful.I really need to get this right once and for all.
I’ll give you the H, L, and C from my platform, together with the pivot levels calculated using those inputs, as you requested.
But, don’t take my values as more “right” than yours — they’re just different (slightly), because we use different brokers and different charting packages.
As I said in my last post, my H, L, and C are different from yours by a pip or less. The result of this is that my pivot levels are different from yours by 2 or 3 pips maximum. These small differences are meaningless.
You can’t expect pivot levels to give you some sort of pin-point precision. At best, they point to areas of potential support and resistance. You should take the calculated numerical values to mean “such-and-such a price level plus or minus a few pips”.
That’s true of all support and resistance levels, by the way. Whenever you see price stop dead, or reverse, exactly at a calculated support (or resistance) level, that support (or resistance) level is obviously validated. We would say that support (or resistance) has held.
But, price could have stopped or reversed several pips above or below the calculated support (or resistance) level, and the level would have been just as valid.
[B]“Close” counts in horseshoes, hand-grenades, AND support and resistance.[/B]
Anyway, as you asked, here are my H, L, and C for the GU for last Thursday, plus the pivot levels calculated from those inputs:
As for your second request (regarding displaying your pivot levels), I don’t know anything about your broker, or what changes they may have made to the MT4 platform and charting package. You should be able to zoom in, or out, and move your chart around manually.
If your version of MT4 comes with a User Guide, or a Help feature, look there first. If your broker has email or phone assistance, try that. Sorry, I can’t be any help on this.
