Pivot Point Target Prices [SS]

How it works

The indicator tracks previous pivot highs and lows within a designated lookback timeframe, calculating the average difference between these points to establish an ATR range. It simultaneously analyzes the standard deviation of this range, which allows the generation of three distinct price targets: two standard deviations below the anticipated target, the middle target value, and two standard deviations above the anticipated target.

Traders can customize the indicator by adjusting the number of left and right bars for pivot points, typically using 15 and 15 or the standard 10 and 10. The ATR length can also be modified, with default settings at 500, allowing for more conservative targets by shortening to 75-150 or more aggressive targets by extending to 750-1,000.

Why it may be useful

This indicator provides traders with a sophisticated approach to identifying potential price targets by combining pivot point analysis with average true range calculations. By tracking historical price movements and calculating standard deviation, it offers a more nuanced view of potential price ranges beyond traditional support and resistance levels.

The multi-target approach gives traders flexibility in their decision-making, allowing them to consider different potential price scenarios. This can help in setting more precise entry and exit points, managing risk, and developing more informed trading strategies across various market conditions and timeframes.

When to explore it

The pivot point target price indicator is most effective in markets with clear trending or range-bound behaviors, where historical price movements can provide meaningful insights into potential future price actions. It works particularly well in liquid markets with sufficient price history to generate reliable pivot points and range calculations.

Traders should consider using this indicator during periods of moderate to high market volatility, where price movements are significant enough to generate meaningful pivot points. It is especially useful for traders seeking a systematic approach to identifying potential price targets that goes beyond traditional support and resistance level analysis.

Keep exploring