The Pivot Points MT5 indicator is a strictly price action based technical indicator that use formulas to identify the market’s general trend across a range of time periods. Futures traders were the first ones to use it. Since then, it has spread to other financial markets, such as the currency markets. The Pivot Point is calculated as the average of the session’s high, low, and closing prices. This means 24 hours in the Forex market. You should bear in mind, however, that this will depend on the time your broker chooses to mark the start of the day, whether it be GMT, GMT +1, or some other time.
The Pivot Points indicator not only shows the Pivot Point but also plots the support and resistance levels above and below the Pivot Point. These are called resistance one, resistance two, resistance three, support one, support two, and support three. Traders should look for possible support and resistance at these support and resistance levels.
You can see that the indicator has a yellow line for the pivot point, red lines for the three resistance levels, and blue lines for the three support levels. The plan is for short-term traders to monitor these levels for responses.
During the trading session, one of the most common ways to use the Pivot Points indicator is to look for turning points. Observing how far the market is opening from the pivot point can help traders use the Pivot Points to their advantage and increase profits.