What are pivot points in trading?
In one line: Pivot points are price levels worked out from the previous period's high, low and close, used as possible support and resistance for the next period.
The classic formula
Take yesterday's high (H), low (L) and close (C).
- Pivot (P) = (H + L + C) ÷ 3
- R1 = (2 × P) − L
- S1 = (2 × P) − H
- R2 = P + (H − L)
- S2 = P − (H − L)
R means resistance, a level above. S means support, a level below.
A simple example
Yesterday: high 110, low 100, close 106.
- P = (110 + 100 + 106) ÷ 3 = 316 ÷ 3 = 105.33
- R1 = (2 × 105.33) − 100 = 110.67
- S1 = (2 × 105.33) − 110 = 100.67
- R2 = 105.33 + 10 = 115.33
- S2 = 105.33 − 10 = 95.33
These 5 lines are fixed for the whole day. They don't move as price moves.
Why it matters
Pivot points have been used by floor traders for decades, and many day traders still watch them. Because so many eyes are on the same lines, price sometimes reacts near them.
A simple read: price above the pivot leans bullish for the day, below leans bearish. R1 and S1 are common places to watch for a reaction or set a target.
They're most useful when they line up with a level price already turned at on the chart. That overlap is Confluence.
A common mistake
Treating every pivot line as a wall. On many days price slices through R1 or S1 without a pause. A pivot is a place to pay attention, not a promise of a bounce.
Wait for a candle body to close and show you what price is doing at the line. Then plan the stop from there.
A pivot level that matches an old turning point on the chart is worth more than one floating in empty space.
Questions
Which timeframe are pivot points for?
Daily pivots, from yesterday's numbers, suit day trading. Weekly and monthly pivots use the last week's or month's numbers and suit longer trades.
Are there other types of pivot points?
Yes: Fibonacci, Camarilla and Woodie pivots use different formulas. The classic version above is the most common default.
What close do forex pivots use?
Forex trades nearly 24 hours, so platforms pick a cut-off, often 5 pm New York time. Different cut-offs give slightly different levels.
Want the next step? We'll walk you through it.
Four free lessons by email, one every few days — each with a 10-minute exercise on a real chart.
Send Me the Free Lessons 4 short emails · No spam · Unsubscribe anytimeOr see the whole method, step by step:
See What’s Inside the Course Try everything free first. Decide when you're ready. · Open the free chart tool (works in the TradingView phone app)One chart idea a day, in plain English. Follow along: