Pivot Points

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Definition of 'Pivot Points'

Pivot Points are also know as floor pivots. These are the places where traders expect support and resistance to occur in the market and as such are used as entry and exit points for trades.

Depending on the type of pivot formula used you can generally generate and use up to 9 levels. These levels are marked and calculated by starting with a center pivot called a Pivot Point and labeled as PP. From that point, moving up, the resistance levels are numbered sequentially as R1, R2, R3, R4 with R4 being the highest value. The support levels are numbered in the same way S1, S2, S3, S4 with S4 being the lowest support value.

There are a number of ways to calculate pivots points. Here are some of the more popular methods: Classic Pivot Points, Camarilla Pivot Points, DeMark Pivot Points, Woodie Pivot Points.

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