Pivot Points
Technical IndicatorsA set of horizontal support and resistance levels calculated from the previous period's high, low, and close. The central pivot, along with S1-S3 support and R1-R3 resistance levels, helps traders identify potential turning points and target prices.
What Are Pivot Points?
Pivot points use the previous session's high, low, and close to calculate a central level (the pivot) and three support levels (S1, S2, S3) and three resistance levels (R1, R2, R3) for the current session. The standard formula: Pivot = (High + Low + Close) / 3. These levels are plotted as horizontal lines and act as potential support and resistance zones throughout the day.
Trading with Pivot Points
If the market opens above the pivot, the bias is bullish. Below, bearish. The R1 and S1 levels are the first targets. During trending days, R2/S2 are realistic secondary targets, while R3/S3 are reached only during the strongest moves. Bounces off pivot levels provide entry opportunities: go long at S1 with a stop below S2, targeting the pivot or R1. Use the Profit/Loss Calculator to convert the pip distance between levels into potential profit for your position size.
Variations
Beyond standard pivots, traders also use Fibonacci Pivot Points (which use Fibonacci ratios for support/resistance distances), Camarilla Pivot Points (which generate tighter levels suited for intraday range trading), and Woodie's pivots (which weight the current open more heavily). Each produces slightly different levels. The best approach is to pick one method and use it consistently. Pivots combine well with RSI (Relative Strength Index) or Stochastic Oscillator to confirm whether a level will hold or break.
Related Terms
Camarilla Pivot Points
A variation of standard pivot points that generates eight levels (four support and four resistance) clustered more closely around the current price. Designed for intraday trading, they emphasize range-based mean reversion strategies.
Fibonacci Pivot Points
A variation of standard pivot points that uses Fibonacci ratios (38.2%, 61.8%, 100%) to calculate support and resistance levels. They combine the predictive power of Fibonacci retracements with the simplicity of pivot point calculations.
VWAP (Volume Weighted Average Price)
An intraday benchmark that calculates the average price weighted by volume. VWAP resets daily and shows the average price at which a pair has traded throughout the session, helping traders identify whether they are buying above or below fair value.