Taylor Pivot

Note: This indicator plots only the Taylor Pivot. The ROC indicator is not included and is not displayed separately.

The Taylor Pivot is an indicator based on a classic short-term trading technique originally developed by Taylor and later popularized by professional trader Linda Raschke in her book. Raschke highlights this approach as a simple way to identify the market’s likely short-term direction, focusing on a single positioning decision per day (buy or sell), which reduces psychological stress compared to constant day trading. The core idea is to position at the close of the day according to the expectation of continuation or follow-through in the next session, taking advantage of reversals or early market tests and allowing winning trades to be carried overnight to capture additional movement.

The core of the technique lies in calculating a short-term pivot point derived from the 2-period Rate of Change (ROC) on the daily timeframe. This pivot indicates the level at which short-term momentum (measured by the difference between recent closes) is expected to change direction. The practical rule is:

Buy signal: If the closing price is above the Taylor Pivot, a long position is taken at the close, betting on bullish continuation the next day.
Sell signal (short): If the closing price is below the Taylor Pivot, a short position is taken at the close, expecting further bearish pressure.

This method prioritizes simplicity: only one main entry per day, with a focus on capturing the follow-through move of the following morning rather than multiple intraday trades.

Indicator Inputs

Taylor Pivot Color (default color: DodgerBlue): Allows changing the color of the pivot line displayed on the chart.
DaysToPlot (default: 1): Defines how many days of pivots will be plotted. A value of 1 shows only the current day’s pivot; higher values display pivots from previous days for historical reference.
ShowThinLine (default: false): When enabled (true), draws a thin continuous line connecting intrabar prices to the pivot value. When disabled, only thick horizontal lines (width 2) are displayed for each day, visually highlighting the exact pivot level without cluttering the chart.

Chart Visualization
The indicator plots horizontal lines on the chart (on whatever timeframe is being used), valid only for the corresponding day (from 00:00 to 23:59:59). The lines are drawn as horizontal trend objects, with backdraw enabled so they do not overlap the candles. This makes it easy to quickly identify whether the price is above (potentially bullish) or below (potentially bearish) the pivot at the close.