A pivot point is a single number worked out from the high, low and close of the previous trading session. It comes together with a set of levels derived above and below it. The whole set is arithmetic on figures that are already fixed — no judgement enters it at any step.
Definition and Formula
The classic method takes the average of the previous session’s high, low and close. That average is the pivot. Three levels are then derived above the pivot: R1, R2 and R3. Three more are derived below it: S1, S2 and S3.
Each of the six is a fixed step away from the pivot. The size of each step comes from the previous session’s range: the distance between its high and its low. A wide session produces widely spaced levels; a narrow session produces closely spaced ones.
Other methods exist and this site computes five of them. Fibonacci places the levels at fractions of the range. Woodie gives the close double weight in the pivot itself. Camarilla derives its levels from the close rather than from the pivot. DeMark picks one of three formulas by comparing the open with the close. They differ only in arithmetic, not in the raw material.
The labels R and S are conventional names for the levels above and below the pivot. The numbers after them state how far out each one sits. R1 is the nearest level above, and R3 the furthest. The label is a position in the set, not a claim about the level.
Only DeMark reads the open, and it reads it only to choose between three formulas. The other four methods never touch it. That is why a pivot calculator hides the open field for four of the five methods. Asking for a number that four methods will discard is asking for it without reason.
Formula: Pivot = (High + Low + Close) ÷ 3 · R1 = (2 × Pivot) − Low · S1 = (2 × Pivot) − High · R2 = Pivot + (High − Low) · S2 = Pivot − (High − Low)
A Worked Example
| High | 24,350.00 |
|---|---|
| Low | 24,150.00 |
| Close | 24,280.00 |
| R3 | 24,570.00 |
|---|---|
| R2 | 24,460.00 |
| R1 | 24,370.00 |
| Pivot (PP) | 24,260.00 |
| S1 | 24,170.00 |
| S2 | 24,060.00 |
| S3 | 23,970.00 |
The seven numbers above come from the same code that builds the index and stock levels pages on this site.
What This Number Tells You
The set describes one completed session in a compact form: where its middle was, and how wide it ran.
The spacing between the levels is the previous session’s range restated. Comparing the spacing across sessions is comparing the ranges of those sessions.
And What It Does Not Tell You
A pivot level is not a place where the price is expected to stop or turn. The arithmetic contains nothing about the future at all.
No method among the five is more correct than another. They are different computations on the same three inputs. A number that appears in one method and not in another is missing because that method has no formula for it. It is not because anything was left out.
The levels say nothing about how likely the price is to reach them, and nothing about what would happen if it did.
Frequently Asked Questions
Which session do pivot points come from?
The whole previous completed session. A session still running has no fixed high, low or close, so no pivot can be derived from it.
Why do Woodie and DeMark show fewer levels?
Because those methods define fewer. Woodie derives two levels above and two below; DeMark derives one of each. Where a method has no formula for a level, this site prints no number for it rather than filling the gap.
Do pivot points work on any instrument?
The arithmetic runs on any instrument that has a high, a low and a close. That covers an index, a stock or a commodity future. What the numbers mean is the same in every case: a description of the session they came from.
How often do they change?
Once per session. Each new trading day is computed from the session that has just finished. So the numbers are new every day, and fixed within it.
What do the numbers after R and S mean?
They state how far out the level sits from the pivot. R1 is the nearest level above and R3 the furthest; S1 is the nearest below and S3 the furthest. The number is a position in the set and nothing more.