Pivot Points Guide

Pivot points are one of the simplest yet most powerful ways to determine support and resistance levels. Many day traders use them daily.

What Are Pivot Points?

Pivot points are calculated based on the previous day's high, low, and close price. The main level is the pivot point. Above it are resistance levels (R1, R2, R3) and below it are support levels (S1, S2, S3).

How To Use Pivot Points?

1. Trend Direction

When price opens above the pivot point, the expectation is bullish. If it opens below, the expectation is bearish.

2. Bounce Trading

The support and resistance levels act as potential bounce points. Wait for confirmation before opening a trade.

3. Breakout Trading

When price breaks through a resistance level, it may continue to the next level. The same applies to support levels.

Types of Pivot Points

There are different types of pivot points:

• Standard (the most used)
• Fibonacci
• Camarilla
• Woodie

Tips

• Combine pivot points with other indicators
• They work best on intraday timeframes
• Watch for convergence with other support/resistance levels

Conclusion

Pivot points are a simple but effective way to give structure to your trading. They work best combined with price action and other indicators.