GlossaryIntermediate
Pivot Points
Predetermined support and resistance levels calculated from the prior period's high, low, and close, used as reference levels for the current period.
Pivot Points are calculated from the prior period's high, low, and close, producing a central pivot level plus a series of support and resistance levels above and below it (commonly labeled S1, S2, S3 and R1, R2, R3).
Because they're calculated purely from the prior period's data, all of a day's pivot levels are known in advance, before the new period even begins — unlike most other indicators, which update continuously as new price data comes in. See Kaavon's dedicated Pivot Points article for the full calculation.
Examples
- A trader can calculate an entire day's pivot levels before the market even opens, since they're derived entirely from the prior period's data.
- Price approaching an R1 or S1 pivot level is commonly watched as a potential area of resistance or support for the current period.