Pivot points
How pivot points are calculated, the main variants and how to trade around them.
Start the chapter4 lessons · 1 tools
Lessons
- 01What are pivot points?Pivot points are support and resistance levels calculated from the previous period's high, low and close. The main pivot, P, is the average of those three prices. Formulas built from P and the previous high and low then give resistance levels R1 to R3 above it and support levels S1 to S3 below it, fixed for the whole period.
- 02Standard, Fibonacci and Camarilla pivots.All three methods use the previous day's high, low and close. Standard pivots set P = (H + L + C) ÷ 3 and build levels from P and the range. Fibonacci pivots place levels 38.2%, 61.8% and 100% of the range either side of P. Camarilla pivots cluster tightly around the close using the constant 1.1.
- 03How to trade with pivot points.Pivot points give two common trade setups. In a range, traders buy near S1 or sell near R1 and target the central pivot. On a breakout, they trade a candle close through R1 or S1 toward R2 or S2. In both, the stop sits just beyond the level, so a failed level costs a small, planned loss.
- 04Pivot points cheat sheet.A pivot point is the average of the previous period's high, low and close: P = (H + L + C) ÷ 3. Standard levels come from P and the range, Fibonacci pivots sit 38.2%, 61.8% and 100% of the range from P, and Camarilla levels sit near the previous close. None predicts where price will turn.