Pivot Points Olymp Trade Indicator

This is a technical indicator that is helpful to find potential asset price reversal points.

Its use was first mentioned as far back as 1934. Although various different variations of Pivot Points have been created over time, they all use the same principle and rely on support and resistance levels.

The value of the indicator is calculated by using the average of the closing, minimum and maximum price of assets. Pivot points are otherwise known as equilibrium points, growth points, or reference points.

Formulas

Pivot Points Olymp Trade Indicator
Olymp Trade Pivot Points Indicator formulas

Pivot points are useful for predicting potential key resistance and support levels. The time periods mainly used are days, weeks, months, and years. The pivot points of the resistance and support levels and the central axis are used to find the asset’s price movement’s direction, using the least number of calculations.

Formulae

PP = close / 3 + LOW + high

R1 = PP*2 – LOW

R2 = high + PP – LOW

R3 = high + PP*2 – LOW*2

S1 = PP*2 – HIGH

S2 = LOW + PP – HIGH

S3 = PP*2 + LOW – HIGH*2,

Where:

R = resistance

PP = the central axis.

R1, R2, and R3 = first, second, and third level of resistance;

S = support

S1, S2, and S3 = first, second, and third level of support;

CLOSE = the closing price of the period before the calculated one.

LOW = the lowest price for the period before the calculated one;

HIGH = the maximum price for the period before the calculated one;

The following few tips are not difficult to remember and will help you in making logical decisions when using pivot points to trade.

  • Expect the price to move towards S1 or R1 if it is at the PP level.
  • Expect the price to go back to PP if it is at R1 or to R2.
  • Expect the price to go back to PP if it is near S1 or to S2.
  • Expect the price to go back to R1 if it is at R2 or to R3.
  • Expect the price to go back to S1 if it is at S2 or to S3.
  • The price normally ranges between P and S1 or R1 during times when there is no significant news that may affect the asset.
  • The price can move straight through S1 or R1 and reach S2 or R2 and even S3 or R3 during times when there is important news that may affect the asset.

S3 and R3 indicate the maximum movement size possible, during periods with very high volatility, but these levels are achieved very seldom. Pivot lines work very well if there is lateral movement and the price mainly fluctuates around S1 or R1. With strong trends, the price will break the pivot line and go further.

Configuring the indicator

The indicator is known as Standard reverse points on the Tradingview chart:

Setting the Pivot Points indicator on OlympTrade
Setting the Pivot Points indicator on OlympTrade

There are various changes that can be made in the settings for the indicator, including removing the historical (previous) values, changing style and the period of the level displaying.

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