Pivot Point

Pivot points are calculated using the previous period's high, low, and close prices to project support and resistance levels for the current period. The main pivot point (PP) is the average of these three prices. Additional levels (R1, R2, R3 for resistance and S1, S2, S3 for support) are calculated using the PP and price range. Day traders commonly use daily pivots, while swing traders might use weekly or monthly pivots. Pivot points are self-fulfilling to some extent because many traders watch them. They work best in ranging markets and can act as targets or entry/exit points.