What Are Pivot Points?
💡 Definition
Pivot Points are calculated price levels derived from the previous session’s High, Low, and Close. The central P (pivot) and its surrounding supports (S1–S3) and resistances (R1–R3) act as intraday reference zones for mean reversion, breakouts, and trend continuation.
Think of pivots as a daily roadmap: where price might stall, bounce, or accelerate. They’re most effective with confluence (S/R, trendlines, volume nodes) and awareness of the session (RTH vs ETH).
Visual Representation
Classic Pivot Ladder: S3 • S2 • S1 • P • R1 • R2 • R3
Price often rotates around the Pivot (P). Rejections at R/S levels suggest mean reversion; acceptance beyond favors continuation toward the next rung.
Types of Pivot Points
📏 Classic (Floor) Pivots
The most common set used by intraday traders. Simple arithmetic from prior High/Low/Close.
📐 Fibonacci Pivots
Same central pivot; R/S distances scaled by Fibonacci ratios (0.382, 0.618, 1.000).
🧱 Camarilla
Tighter, mean-reversion focused levels (H/L * constants). L3/H3 for fades; L4/H4 for breaks.
🪵 Woodie
Heavier weight to Close: P = (H + L + 2×C)/4. Levels react faster to recent price.
🧮 DeMark
Conditional formulas based on relation of Close to Open; often fewer levels, good for trend bias.
Key Formulas (Daily)
Classic (Floor) Pivots
(H + L + C) / 32×P − L2×P − HP + (H − L)P − (H − L)H + 2×(P − L)L − 2×(H − P)Fibonacci Pivots
P: same as Classic. Let R = H − L.
P + 0.382×RP + 0.618×RP + 1.000×RP − 0.382×RP − 0.618×RP − 1.000×RWoodie / Camarilla / DeMark (Quick Notes)
(H + L + 2×C)/4Hn/Ln = C ± k×(H−L) (use k multiples: 1.1/1.1, 1.1/1.1…; common L3/H3, L4/H4)Exact Camarilla/DeMark constants vary by implementation; keep your set consistent across backtests and usage.
Why Pivot Points Work (Practically)
- Shared References: Widely watched levels cluster orders and attention.
- Session Logic: Derived from prior day’s auction → natural magnets for rotations.
- Risk Framing: Clean, precomputed zones aid objective stops/targets.
- Confluence Builder: When pivots align with S/R, trendlines, or profile nodes, reactions strengthen.
How to Trade with Pivot Points
Practical Playbook
1. Mark the Ladder: Plot P, S1–S3, R1–R3 from the higher timeframe relevant to your session.
2. Read the Open: Opening above P biases long toward R1; below P biases short toward S1.
3. Mean Reversion: Fade first test of R1/S1 back toward P when context is balanced; require rejection signal.
4. Break & Go: On acceptance beyond R1/S1 with volume, aim for the next rung (R2/S2), using the broken level as a stop reference.
5. Confluence: Strengthen setups with trend direction, higher-timeframe S/R, and volume/flow confirmation.
6. Risk & Targets: Define invalidation just beyond the level. Use next pivot rung(s) for targets and scaling.
Common Mistakes
⚠️ Avoid These Errors
- Trading pivots blindly without price action confirmation.
- Ignoring the day’s regime (trend day vs rotation) and higher-TF context.
- Using mixed formulas inconsistently across backtests and live trading.
- Placing stops exactly on a pivot line (easy to sweep) instead of beyond the zone.
- Forgetting session differences (RTH vs ETH) which shift level behavior.
Advanced Concepts & Variations
📆 Multi-Session Pivots
Use weekly/monthly pivots for swing context; take intraday entries at daily pivots aligned with HTF bias.
🧭 Dynamic Sessions
Choose the session that matches your instrument’s liquidity (e.g., Forex 24h vs Futures RTH).
🔗 Pivots + Profile
POC/HVN at R1 or VAL at S1 strengthens reactions and targets.
🧪 Statistical Filters
Track hit rates between rungs, average excursion, and open-type → refine expectations and stops.
The Bottom Line
Pivot Points give you a premarket map. Trade rejections for rotation or acceptance for continuation, always in context and with defined risk. Keep your formula set consistent, seek confluence, and let the ladder guide entries, stops, and targets.