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Knowledge Base

Pivot Points

PP = (High + Low + Close) / 3
Pivot points predict support/resistance levels for the next trading session.
Calculated from previous day's High, Low, Close — used by floor traders for decades.
R1, R2, R3 = Resistance levels. S1, S2, S3 = Support levels.
Price above Pivot = Bullish bias. Below Pivot = Bearish bias.
Most effective in range-bound/mean-reverting markets. Less useful in strong trends.
Pro Tip
Combine pivot levels with volume analysis — a breakout above R1 on high volume is more reliable.

Pivot Points - Complete Guide

Everything you need to know about Pivot Points and how to optimize your financial strategy.

Understanding the Formula

The core calculation is based on:

PP = (High + Low + Close) / 3

Key Concepts & Rules

  • Pivot points predict support/resistance levels for the next trading session.
  • Calculated from previous day's High, Low, Close — used by floor traders for decades.
  • R1, R2, R3 = Resistance levels. S1, S2, S3 = Support levels.
  • Price above Pivot = Bullish bias. Below Pivot = Bearish bias.
  • Most effective in range-bound/mean-reverting markets. Less useful in strong trends.

Expert Strategy

Combine pivot levels with volume analysis — a breakout above R1 on high volume is more reliable.

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