Pivot points
Description
Pivot points are used to identify potential support and resistance levels in the market.
Pivot points are calculated using the high, low, and closing prices of a particular time period, such as a day, week, or month. The most common pivot point is the daily pivot point, which is calculated using the previous day's high, low, and closing prices. Once the pivot point has been calculated, additional levels of support and resistance, known as "pivot levels," are calculated based on the pivot point.
We calculate pivot points with standard method.
The formula:
Pivot point (P) = (H + L + C) / 3
First level of support (S1) = (2 * P) - H
First level of resistance (R1) = (2 * P) - L
H is the previous period's high, L is the previous period's low, and C is the previous period's closing price.
Pivot points can be used to identify potential areas where the price may find support or resistance. If the price is approaching a pivot level and is showing signs of reversing, it may be a good time to enter or exit a trade. Use pivot points in combination with our other tools to make informed decisions.
End Point
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