Pivot Point Calculator

Pivot Point Calculator

A Pivot Point Calculator is a tool used by traders and investors to calculate various support and resistance levels based on the previous day’s price data. Pivot points are widely used in technical analysis to identify potential price levels where a financial instrument may reverse its direction or experience a significant price movement. The most common pivot points and associated support and resistance levels are as follows:

  1. Pivot Point (PP): (High + Low + Close) / 3
  2. First Resistance (R1): (2 * PP) – Low
  3. First Support (S1): (2 * PP) – High
  4. Second Resistance (R2): PP + (High – Low)
  5. Second Support (S2): PP – (High – Low)
  6. Third Resistance (R3): High + 2 * (PP – Low)
  7. Third Support (S3): Low – 2 * (High – PP)

Here’s how you can manually calculate these levels:

  1. Identify the high (H), low (L), and close (C) prices for the previous trading day.

  2. Calculate the Pivot Point (PP) using the formula: PP = (H + L + C) / 3

  3. Calculate the support and resistance levels:

    • First Resistance (R1) = (2 * PP) – L
    • First Support (S1) = (2 * PP) – H
    • Second Resistance (R2) = PP + (H – L)
    • Second Support (S2) = PP – (H – L)
    • Third Resistance (R3) = H + 2 * (PP – L)
    • Third Support (S3) = L – 2 * (H – PP)

These levels can be used to make trading decisions and set stop-loss and take-profit orders. Traders often look for price action around these levels to gauge the strength and direction of a trend.

You can also find online Pivot Point calculators that make these calculations for you automatically. Simply input the high, low, and close prices for the previous trading day, and the calculator will provide you with the Pivot Point and associated support and resistance levels.

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