Pivot Points

Pivot points are pre-calculated support and resistance levels generated from the prior session's high, low, and close. The central pivot (PP) is the average of those three. Above the pivot, you get R1, R2, R3 (resistance levels). Below, you get S1, S2, S3 (support levels). The math is fixed, which means every trader using pivots is looking at the same levels. Pivots are most popular with day traders and futures traders. They give you objective levels to plan around for the trading day. Above the pivot = bullish bias for the session. Below the pivot = bearish bias. R1 and S1 are the most respected intraday levels because the math puts them where price is most likely to reverse on a normal day. There are several pivot calculations (Standard, Fibonacci, Camarilla, Woodie's). Standard pivots are the most common and the most-watched.