Pivot Points

Standard (Floor) Pivot Points — the original method used by floor traders:

Pivot (P) = (High + Low + Close) / 3 R1 = (2 x P) - Low S1 = (2 x P) - High R2 = P + (High - Low) S2 = P - (High - Low) R3 = High + 2 x (P - Low) S3 = Low - 2 x (P - High)

Example: Yesterday's High = $155, Low = $148, Close = $152. P = ($155 + $148 + $152) / 3 = $151.67 R1 = (2 x $151.67) - $148 = $155.33 S1 = (2 x $151.67) - $155 = $148.33 R2 = $151.67 + ($155 - $148) = $158.67 S2 = $151.67 - ($155 - $148) = $144.67

These levels are calculated once per day (using the previous day's data) and remain fixed for the entire session. This simplicity is their strength — no subjective judgment, no parameter tweaking, just math.

Fibonacci Pivots: Use Fibonacci ratios (38.2%, 61.8%, 100%) to calculate support and resistance distances from the central pivot. These produce levels that are tighter to the pivot than standard calculations, making them popular for stocks that tend to trade in narrower ranges.

Woodie Pivots: Weight the closing price more heavily — P = (High + Low + 2 x Close) / 4. The heavier close weighting makes Woodie pivots more responsive to end-of-day positioning. Some traders prefer these because the close is the most important price of the session.

Camarilla Pivots: Use four support levels and four resistance levels calculated with multiplied fractions of the previous range. Camarilla levels are much tighter than standard pivots, designed for scalping and mean-reversion trades. The S3/R3 levels are the primary reversal zones; S4/R4 are breakout levels.

DeMark Pivots: The calculation changes based on the relationship between the open and close. If the close is above the open (bullish day), the formula uses a different weighting than if the close is below the open. This adds a directional bias — DeMark pivots inherently lean in the direction of the prior session's price action.

Which to use: Standard and Fibonacci are the most widely watched, making them more effective due to more traders acting on the same levels. Camarilla works well for scalpers. Start with standard pivots and only add variants once you understand how price interacts with the primary levels.

Pivot bounce (mean reversion): When price approaches a pivot level and shows rejection (long lower wick, reversal candle), enter in the opposite direction with a tight stop just beyond the level. This works because many traders place orders at pivot levels, creating natural buying or selling pressure.

Pivot breakout (momentum): When price breaks through a pivot level with strong volume, trade in the direction of the break. The next pivot level becomes the profit target. For example, a break above R1 targets R2. Confirm breakouts with volume exceeding the 5-minute average.

Opening range + pivots: Combine the opening range breakout with pivot levels. If the ORB high is near R1 and both break simultaneously, the signal is stronger because two independent reference levels confirm the move.

Pivot point trend filter: If the stock is trading above the central pivot (P), maintain a bullish bias — only take long trades. If below P, maintain a bearish bias — only take shorts. This simple filter aligns your trades with the intraday trend.

Pre-market pivot analysis: Before the market opens, identify where the stock's pre-market price sits relative to today's pivot levels. If pre-market price is between R1 and R2, expect early resistance at R2 and potential pullback to R1. Use this analysis to plan entry and exit levels before the opening bell.