Pivot points have stood the test of time.
Before algorithms and advanced charting tools existed, floor traders in stock exchanges used pivot points to predict where prices might pause, reverse, or break through during the trading day.
Even today, professional traders across forex, indices, and commodities rely on them because they work — offering a simple, objective framework for identifying intraday support and resistance levels.
What Are Pivot Points?
Pivot points are mathematical calculations based on the previous trading session’s high, low, and close prices.
They give traders an instant map of potential turning points for the current session — the levels where price might bounce, stall, or break out.
The core idea:
When price trades above the pivot point, market sentiment leans bullish.
When price trades below, sentiment turns bearish.
These levels often act as magnets for price action — especially during high-volume sessions like London and New York.
How to Calculate Pivot Points
The standard formula (used in most platforms and trading tools) is:
Pivot Point (P) = (High + Low + Close) ÷ 3
From this central value, three resistance and three support levels are derived:
| Level | Formula |
|---|---|
| R1 | (2 × P) − Low |
| S1 | (2 × P) − High |
| R2 | P + (High − Low) |
| S2 | P − (High − Low) |
| R3 | High + 2 × (P − Low) |
| S3 | Low − 2 × (High − P) |
Most charting platforms (like MT4, MT5, and TradingView) calculate these automatically, so you don’t need to do the math — but knowing the logic behind it helps you interpret levels better.
How Pivot Points Work
Pivot points reflect the market’s balance point — where buyers and sellers agreed most during the previous session.
When a new session opens:
- If price stays above the Pivot, it signals continued buying momentum.
- If price stays below the Pivot, it suggests bearish control.
- The support (S1, S2, S3) and resistance (R1, R2, R3) levels act as reaction zones — where traders often take profits or look for reversals.
These levels often align with natural price behavior because many traders — human and algorithmic — are watching them simultaneously.
How to Trade with Pivot Points
Here’s how professional day traders typically use pivot levels in practice:
1. Buy Near Support Levels (S1/S2)
When price approaches a support level and shows signs of holding — such as bullish candles, higher lows, or RSI divergence — it’s a potential buying opportunity.
💡 Example:
Price dips to S1, forms a hammer candle, and closes back above the pivot — signaling buyers stepping in.
2. Sell Near Resistance (R1/R2)
When price rises toward a resistance level and fails to break through, it suggests sellers are defending the zone.
💡 Example:
Price tests R1 twice but fails to close above it — a short entry with stop loss just above R1 can offer a clean setup.
3. Watch for Breakouts Beyond R2 or Below S2
Strong directional momentum often occurs when price breaks beyond the outer levels (R2/S2).
This typically signals:
- A trend continuation in the direction of the breakout, or
- A volatility expansion after consolidation.
💡 Pro Tip: Confirm the breakout with volume increase or session overlap timing (e.g., London–New York overlap).
Example: Intraday Pivot Trading Setup
Let’s say yesterday’s:
- High: 1.2100
- Low: 1.2000
- Close: 1.2050
The pivot is:
(1.2100 + 1.2000 + 1.2050) ÷ 3 = 1.2050
So:
- R1 = 1.2100
- S1 = 1.2000
- R2 = 1.2150
- S2 = 1.1950
If the new session opens above 1.2050 and holds, sentiment is bullish.
You could look for buy setups near S1 (1.2000) aiming for R1 (1.2100) — a simple, structured trade.
Why Traders Still Love Pivot Points
✅ They’re objective — based on math, not opinion.
✅ They update daily, keeping your analysis fresh.
✅ They work across all timeframes, especially intraday.
✅ They provide structure and discipline, preventing emotional trades.
Even in the era of AI-driven systems and complex indicators, pivot points remain a favorite because they make traders think in terms of levels and reactions, not random guesses.
Final Thought
Pivot points aren’t perfect — no tool is — but they’re one of the simplest ways to stay objective and disciplined in fast-moving markets.
They help you identify where price balance might shift, so you can plan trades rationally instead of emotionally.
In day trading, that mindset alone is an invaluable edge.
✅ Tip: Fremora+ members get access to our Daily Pivot Map, which automatically plots intraday pivot levels, volatility zones, and breakout alerts across major pairs — updated before every session. [Join Fremora+ →]