Pivot points are technical indicators that calculate potential support and resistance levels based on the previous period’s high, low, and close. Widely used by day traders and floor traders, pivot points provide objective price levels where reversals or breakouts may occur. The central pivot indicates overall market bias; levels above are resistance (R1, R2, R3), levels below are support (S1, S2, S3).
- Calculated support/resistance from prior period’s HLC
- Central pivot shows overall bias
- Self-fulfilling prophecy—many traders watch same levels
How Pivot Points Work
Pivot points calculate key levels automatically:
Standard Pivot Calculation:
Pivot Point (P) = (High + Low + Close) / 3
Resistance Levels:
R1 = (2 × P) - Low
R2 = P + (High - Low)
R3 = High + 2 × (P - Low)
Support Levels:
S1 = (2 × P) - High
S2 = P - (High - Low)
S3 = Low - 2 × (High - P)
Example (Previous Day):
High: $105, Low: $95, Close: $102
P = (105 + 95 + 102) / 3 = $100.67
R1 = (2 × 100.67) - 95 = $106.34
S1 = (2 × 100.67) - 105 = $96.34
Quick Reference: Pivot Point Signals
| Price Position | Interpretation | Bias |
|---|---|---|
| Above Pivot | Bullish bias | Look for longs |
| Below Pivot | Bearish bias | Look for shorts |
| At R1/R2 | Resistance test | Watch for rejection |
| At S1/S2 | Support test | Watch for bounce |
Example: Trading Pivot Points
Intraday Pivot Bounce:
| Time | Price | Level | Action |
|---|---|---|---|
| 9:15 | $101 | Above P | Bullish bias |
| 10:30 | $106 | Testing R1 | Monitor reaction |
| 10:45 | $105 | Rejected at R1 | SHORT entered |
| 11:30 | $101 | Back to Pivot | Take partial profit |
| 12:00 | $97 | Approaching S1 | Exit remaining |
Pivot points are calculated support and resistance levels based on previous high, low, and close. The central pivot shows bias—above is bullish, below is bearish. R1, R2 are resistance; S1, S2 are support. Popular for intraday trading.
Pivot Point Types
Standard (Classic)
Most widely used. Equal weight to high, low, close.
Fibonacci Pivots
Adds Fibonacci ratios (38.2%, 61.8%) to calculate levels.
Camarilla Pivots
Tighter levels, designed for mean reversion scalping.
Woodie’s Pivots
Weights current period’s open more heavily.
Trading Strategies
Bounce Trading
Buy at support pivots, sell at resistance pivots. Stop just beyond the level.
Breakout Trading
Trade when price breaks decisively through a pivot level with volume.
Range Trading
In range-bound markets, fade moves at outer pivots (R2, S2).
Bias Filter
Use central pivot to determine direction. Only take longs above pivot, shorts below.
Common Mistakes
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Using in strong trends – Price blows through all levels in trending markets.
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Expecting exact touches – Price may reverse near, not exactly at, pivot levels.
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Ignoring other factors – Pivot alone isn’t enough. Combine with price action.
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Wrong timeframe – Daily pivots for intraday. Weekly for swing trading.
How JournalPlus Tracks Pivots
JournalPlus logs pivot level proximity at entry, helping you analyze whether pivot-based entries improve your intraday trading results.
