The Pivot Point High Low Indicator can be applied to various time frames, and it is popular among day traders and short-term traders due to its ability to provide a quick snapshot of key levels for the trading day. it also helps traders identify critical price levels, anticipate potential market reversals, and plan their trades accordingly.
In technical analysis, the "high low high" describes a pattern seen in the price movements of a stock or other financial instrument and this refers to a sequence in candlestick charts where a high price is followed by a lower high, then a lower low, and finally a higher low.
- Higher high – a peak higher than the previous peak.
- Lower low – a trough lower than the previous trough.
- Lower high – a peak lower than the previous peak.
- Lower low – another trough lower than the previous one. This pattern might indicate a bearish trend or a series of price corrections.
How to Trade Pivot Points
Pivot points are primarily used to identify potential support and resistance levels, if the price is trading above the pivot point, it indicates bullish sentiment and the levels Higher High and Lower High act as potential resistance. Conversely, if the price is below the pivot point, it indicates bearish sentiment.
They can also help traders determine optimal entry and exit points for their trades, a trader might enter a long position when the price breaks above the pivot point and target the next resistance level for exit. Also, a trader might enter a short position when the price falls below the pivot point and target the next support level. Traders often use pivot points to place stop-loss orders to manage risk, an example is a stop-loss might be placed just below the next support level when entering a long position.
Important Information
As with all technical indicators, use this indicator in conjunction with other indicators and your manual strategy as a confirmation, there are too many variables in the market to trade with a single indicator.
How To Install & Remove
Follow the instructions below to install this indicator.
Any Questions?
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