When used correctly, indicators can help you build a solid trading idea from which you can take a trade and potentially profit. In this post, DGM Tech Solutions looks at the Pivot Points High Low Indicator, one of the most popular technical analysis indicators. Keep reading to find out more.
Pivot Points High Low Indicator: What is it?
Also known as the bar count reversal indicator, the pivot points high low indicator is a technical analysis indicator that helps traders anticipate potential market shifts and price reversals. This high low indicator prints over specific highs and lows depending on the set period. The indicator works across all timeframes and can be used by all traders.
How the Pivots Point High Low Indicator Works
As the name suggests, the indicator forms both pivot point highs and lows depending on the set period of the pivot point value.
The Pivot Points High Low indicator gives traders an edge in the markets by printing pivots on significant highs and lows, which enables them to spot key price patterns.
A pivot point high is determined by the number of lower highs on either side of the pivot point. Conversely, the pivot point low is determined by the number of bars with higher lows on either side of the pivot point low.
Calculation Behind the Pivot Points High Low Indicator
The pivot points high low indicator has a simpler calculation method than the standard pivot points indicator, which relies on an average of the previous period’s high, low, and closing prices.
Pivot Points High Low Indicator | Indicator Series Click To TweetThe indicator calculates the number of bars on either side of a pivot point, high or low, to validate a pivot. For example, a 10-period setting requires a minimum of 21 bars to validate a pivot point high or low. Printing a pivot point high will require 10 lower highs before and after the pivot point high. Also, a 10-period pivot point low requires the price to form 10 higher lows before and after the pivot point low. (Play around with tradingview’s advanced charts for free).
The pivot points high low indicator allows you to customize your periods. Therefore, you can increase the period setting to get more significant pivot point highs and lows that offer bigger moves in the market.
How to trade with the Pivot Points High Low Indicator
Building confluence is key as far as technical analysis is concerned. Therefore, using this indicator with a viable trading system is best to create a stronger market edge.
You should consider factors like the underlying trend and seek confluence from other technical tools and indicators like previous highs and lows, trend lines, moving averages, and Fibonacci levels.
Summary
The Pivot Point High Low Indicator is a powerful indicator that helps traders make more accurate analyses by focusing on significant highs and lows in the markets. Any trader can incorporate pivot point highs and lows into their trading strategy to build confluence. DGM Tech Solutions offers consultation and IT services to Brokerage Firms, Financial Institutions, and Gaming Operators. Retail traders can also enjoy access to our highly accurate trading tools. Contact us to learn more about our services.