Tue. Oct 4th, 2022

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How to Calculate Pivot Points?

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Pivot points ask technical indicators employed by day traders to spot potential support and resistance price levels during a stock exchange. They are based on the previous day’s high, low, and closing prices. Traders use pivot points and therefore the support and resistance levels they supply to work out potential entry, exit, and stop-loss prices for trades.

The main technique that the majority traders use to calculate pivot points is that the five-point system. The system uses the previous day’s high, low, and shut prices, also the support and resistance levels. The five-point system uses the following equations:

Pivot point (P) = (Previous High + Previous Low + Previous Close)/3

S1= (P x 2) – Previous high

S2 = P – (Previous High – Previous Low)

S3 = Low – 2(High – PP)

R1 = (P x 2) – Previous Low

R2 = P + (Previous High – Previous Low)

R3 = High + 2(PP – Low)

Where:
S1= Support 1

S2 = Support 2

S3= Spport 3

R1 = Resistance 1

R2 = Resistance 2

R3= Resistance 3

 

 

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