The DeMarker Pivots MT4 Indicator is a trading strategy which is based of pivot point studies. Many traders like to use support and resistance level as entry or exit points. And although there are several way of defining support and resistance, we have made available a really useful indicator, DeMarker Pivots MT4 Indicator, for making it easier to identify key pivot levels. This indicator works by plotting dynamic pivot points which can be used to trade short term price reversals at key price areas.
DeMarker Pivots MT4 Indicator Strategy and Trading Rules
- Stop and reverse if the momentum of price action cannot break the pivot.
- Go straight through the pivot, in which case a short term reversal to the broken pivot may occur prior to resumption of the previous trend. The price action may also go straight through to the next pivot in the line of price advance.
The strategy is therefore to watch to see which of these two scenarios will play out at a pivot point before proceeding to trade based on what is observed.
DeMarker Pivots MT4 Indicator Long Trade Entry Rules
A long trade entry is made when the following setup is displayed on the chart:
- A downtrending price action fails to break the pivot point in the line of advance, thus causing this price action to reverse at this pivot point. The long trade is taken at the point of bounce, where the bear candle touches the pivot point but does not close below it. The long trade entry used here is a MARKET BUY. This is the setup shown in our example.
- Alternatively, another setup which should prompt a long entry is for an uptrending price action to break the pivot immediately above it, and exhibit a retracement to the broken pivot. The broken pivot will no longer function as a resistance but as a support, and price will bounce on this pivot to resume the uptrend. The long trade is therefore taken at the point where the candles bounce on the pivot, and this entry is made with a BUY LIMIT entry upon the original break of price action.
Here we see the initial downtrending price action which is rejected at the red pivot line. The candles touched the pivot without closing below it. Thus the long entry is made by buying at market price at the open of the next candle as shown above.
Stop Loss and Take Profit Settings
The stop loss is set below the lowest point of the preceding candles. This ensures that retreating price action does not close the trade in a loss in an otherwise potentially profitable setup.
The 1st Take Profit point (TP1) is the nearest pivot above the uptrending price action. Where this pivot is broken by the candle, then the trader can use a trailing stop to follow the price to the next pivot point. Otherwise, the trader may decide to close the trade manually if satisfied with the profits made from the trade.
DeMarker Pivots MT4 Indicator Short Trade Entry Rules
A short entry is made when the following setup occurs on the charts:
- Uptrending price rejected at the pivot above it. This manifests as a candle which touches the pivot but does not close above it. In this case, the short trade is a MARKET SELL which is initiated at the open of the next candle.
- Alternatively, a short trade setup may be seen when the downtrending price has broken through the pivot below it (i.e. closed below the pivot located in the line of price decline). In this case, wait for a pull back to the broken pivot, and initiate the trade using a SELL LIMIT entry. This entry is setup while the pullback is ongoing. This is the setup shown in the chart example.
Stop Loss and Take Profit Settings
The stop loss is set above the highest point of the preceding candles. This ensures that the stop loss for the trade is not prematurely triggered by any transient retreat of price action.
The Take Profit point can be set at the nearest pivot along the line of price decline. Again if the selling momentum is so strong that the candles break the pivots (i.e. close below them), then a trailing stop can be used to follow the price to the next pivot below. Notice that there was also an opportunity for re-entry on this chart after the TP2 area. This indicates that the indicator can also be used for re-entry trades based on the same principles.
Recommended Time Frames for the DeMarker Pivots MT4 Indicator
Technically speaking, you can use this MT4 indicator for all time frames. However, the shorter the time frame, you will see more fluctuation and possibly more whipsaw which may cause small losses that can eat up your portfolio quickly. We recommend that you use higher time frames like the 4H for better consistency.
DeMarker Pivots MT4 Indicator Download
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