## What are Pivot Points?

Within a price chart, a pivot point manifests as the arithmetic mean of an instrument’s previous trading day’s high, close, and low prices, divided by three. When the instrument’s price for the subsequent trading session falls below the pivot point level, it may indicate a prevailing downtrend. Conversely, if the instrument’s price surpasses the pivot point level, it can be interpreted as an ongoing uptrend.

The calculation of a pivot point involves determining the average of the high, low, and close prices, divided by three. This formula generates pivotal levels consisting of the central pivot level and three levels of price support and resistance. These levels can be effectively traded using breakout and bounce trading strategies, akin to conventional support and resistance levels and trendlines.

The pivotal advantage of employing the pivot point strategy lies in its widespread usage among traders, including large institutional professionals who rely on the same formula to determine levels. Pivot point strategies are popular due to their predictive nature, as opposed to lagging indicators. Many traders utilize the previous day’s price calculations to forecast potential reversal points or breakout levels for the current trading session.

Our Pivot Point Calculator delivers precise calculations for the seven pivotal levels of any financial instrument: the central pivot point, three resistance levels, and three support levels. The most commonly used levels are the pivot point (PP), the first level of resistance (R1), and the first level of support (S1).

## How to Use the Pivot Point Calculator

Type: Traders can select from four different methods for calculating pivot points. The distinction between these methods lies in the number of levels considered and displayed:

**Standard Method:**Seven levels ranging from R3 to S3.**Woodie Method:**Five levels ranging from R2 to S2.**Camarilla Method:**Nine levels ranging from R4 to S4.**DeMark Method:**This method requires the asset’s opening price and calculates only two levels, ranging from R1 to S1.

For instance, let’s assume we wish to calculate the Standard pivot points for the EUR/USD pair in preparation for the next trading session. In our example, we will select the Standard calculation method.

**High Price:** Input the highest price attained by the EUR/USD pair during the previous trading session. For instance, let’s use 1.20552.

**Low Price:** Similarly, input the lowest price reached by the EUR/USD pair during the previous trading session. For example, let’s use 1.19653.

**Close Price:** Lastly, input the closing price of the EUR/USD pair from the previous trading session. For example, let’s use 1.20154.

After providing the necessary inputs, click the Calculate button.

**The Results:** The Pivot Point Calculator, operating in Standard mode, will promptly calculate and display the seven pivot levels for the EUR/USD pair in preparation for the upcoming trading session. The pivot point (PP) level for the following day will be 1.2012, with three support levels at 1.1969 (S1), 1.1922 (S2), and 1.1879 (S3). Additionally, three resistance levels will be generated at 1.2059 (R1), 1.2102 (R2), and 1.2149 (R3).

The pivot point trading strategy, which is a non-lagging price action trading strategy employed by many expert traders, can produce positive outcomes. However, a number of retail CFDs brokers maintain data servers in several time zones, thus data may vary from the official markets. As a result, trading terminal graphics and pricing may vary from broker to broker.

In order to ensure that the prices used (high, low, and close) match the price data from the official market, the data used for the calculations for an efficient pivot point strategy should be the data retrieved from an asset’s official market trading hours.