Indicators & Analysis
Intermediate
Pivot Points
Also called: floor pivots, classic pivots
Daily support and resistance levels calculated from the previous day's high, low, and close.
Definition
Pivot points generate a centre line (P) plus support (S1, S2, S3) and resistance (R1, R2, R3) levels for the current session, derived from prior-session high, low, close.
Day traders use pivots as reference points for entries and bias: trading above P = bullish for the day; below = bearish.
Formula
P = (High + Low + Close) / 3 R1 = 2P − Low S1 = 2P − High R2 = P + (High − Low) S2 = P − (High − Low)