Pivot Points Daily Shifted Indicator

The Pivot Points Daily Shifted Indicator for MT4 is a leading forex tool that calculates the key support and resistance levels for the current trading day using the previous day’s prices. These levels are widely used by technical traders to anticipate potential reversal points, identify high-probability entry points, and plan stop-loss and take-profit strategies.

Pivot points are a cornerstone of many forex strategies and can be applied to stocks, binary options, and other financial instruments. This indicator is suitable for both new and advanced traders. Beginners can use it as an independent trading system, while experienced traders can combine it with other technical indicators and price action analysis to enhance trading accuracy.

How the Pivot Points Daily Shifted Indicator Works

The indicator calculates daily pivot levels based on previous price data. Key levels include:

Pivot Level (P): Central price level representing market equilibrium.

Support Levels (S1, S2, S3): Potential zones where price may reverse upward.

Resistance Levels (R1, R2, R3): Potential zones where price may reverse downward.

These levels serve multiple purposes:

Entry points: Identify optimal BUY or SELL trades.

Stop-loss placement: Protect positions using the next lower or higher pivot.

Take profit: Set targets at upcoming support or resistance levels.

The shifted calculation adjusts pivot levels according to the hours, ensuring relevance for intraday trading strategies.

Trading Signals Using Pivot Points

Pivot points are interpreted using simple rules:

Price opens above the pivot: Generally indicates a bullish day. Traders look for buying opportunities near support levels.

Price opens below the pivot: Generally indicates a bearish day. Traders look for selling opportunities near resistance levels.

A key component of pivot trading is validating whether the price will reverse or continue at each level. Price action confirmation is crucial—candlestick patterns, trend lines, or additional indicators can confirm potential reversals or breakouts.

Buy Setup Example

Price reaches Support 1, 2, or 3.

Observe for bullish price action or candlestick confirmation.

Place a BUY trade with stop-loss below the previous swing low or lower support.

Take profit at the nearest resistance levels.

Sell Setup Example

Price reaches Resistance 1, 2, or 3.

Observe for bearish price action or candlestick confirmation.

Place a SELL trade with stop-loss above the previous swing high or higher resistance.

Take profit at the nearest support levels.

Strong reversal points are typically found at Resistance 3 (R3) and Support 3 (S3). Pivot points remain constant throughout the trading day, allowing traders to plan entries and exits well in advance.

Advantages of Using the Indicator

Provides clear daily support and resistance levels.

Assists in planning entries, stop-loss, and take profit.

Works independently or with other indicators.

Useful for scalping, intraday, or swing trading strategies.

Can be integrated into automated trading systems.

Conclusion

The Pivot Points Daily Shifted Indicator for MT4 is a classic yet essential tool for forex traders. By highlighting daily support and resistance levels, it helps traders identify potential reversal zones and develop a structured trading strategy. Whether used alone or in combination with price action and other indicators, pivot points provide actionable insights for intraday and swing trading. The indicator is free to download and easy to install, making it accessible for all traders looking to improve their daily trading strategy.