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Pivot points are technical analysis levels calculated using the previous period’s high, low and closing price. The central pivot point (PP) is accompanied by potential resistance levels (R1, R2 and R3) above it and support levels (S1, S2 and S3) below it.

Traders may use pivot points to help identify potential areas of support and resistance and to assess price movement during a trading session. Some traders also use the position of price relative to the central pivot as one factor when assessing potential market direction.

Pivot points are a technical analysis tool and do not guarantee that price will reach, hold or reverse at any particular level. Market conditions can change rapidly, and technical indicators should not be considered a reliable predictor of future performance.

The standard formula takes the previous period’s high, low and close. The pivot is (High + Low + Close) / 3. R1 = (2 × Pivot) − Low and S1 = (2 × Pivot) − High. R2 = Pivot + (High − Low) and S2 = Pivot − (High − Low), with R3 and S3 extending further. On the WrPro platform and most charting tools these plot automatically, so you rarely calculate them by hand.

Day traders commonly use daily pivots derived from the prior day’s range. A move above the central pivot suggests intraday bullish bias, below it bearish. Traders watch R1–R3 as potential resistance to sell or take profit, and S1–S3 as support to buy or cover. Levels can act as bounce or breakout zones, so they are best combined with price action and confirmation, using stops to control risk.

Pivot points are widely used by day traders as a technical-analysis tool to identify potential areas of intraday support and resistance. They are calculated from previous price data and can provide objective reference levels for planning and analysing trades.

Pivot points may be particularly useful when markets are trading within a defined range or showing clear intraday structure. However, they do not guarantee that price will reverse or react at a particular level. During strong market moves or periods of significant news and volatility, price can move through pivot levels without a meaningful reaction.

For this reason, pivot points are generally best considered alongside other forms of market analysis rather than used as a standalone trading signal. Traders should also consider their individual risk tolerance and trading strategy, particularly when trading leveraged products, where losses can be substantial.

The pivot timeframe should match your trading horizon. Intraday traders typically use daily pivots from the previous day’s data, giving fresh levels each session. Swing traders may use weekly pivots, and longer-term traders monthly pivots. Using a higher-timeframe pivot generally produces stronger, more-watched levels. Match the pivot period to how long you plan to hold, and confirm signals rather than acting on the level alone.

Both pivot points and Fibonacci retracements are commonly used as technical-analysis tools to identify potential areas of support and resistance, but they are calculated differently.

Standard pivot points are calculated using the previous period’s high, low, and closing price according to a defined formula, producing a set of reference levels for the next period. Fibonacci retracements are typically drawn between a selected swing high and swing low, with commonly used percentage levels including 38.2% and 61.8%.

Pivot points are formula-based and provide consistent reference levels based on the selected period, whereas Fibonacci retracement levels depend on the swing points selected by the trader. Some traders use both tools together to identify areas where different technical levels coincide.

Neither method guarantees that price will react at a particular level, and technical-analysis tools should be considered alongside appropriate risk management and other relevant market information.