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Pivot points are intraday levels calculated from the previous session’s high, low and close. The central pivot marks the day’s perceived equilibrium, with support levels (S1, S2, S3) below and resistance levels (R1, R2, R3) above. For stocks and indices, traders use them as objective reference points for potential turning zones and to gauge whether the day is leaning bullish or bearish. They indicate probable areas of interest, not guaranteed reversal points.

The standard formula is: Pivot (P) = (previous High + Low + Close) / 3. From there, R1 = 2P − Low, S1 = 2P − High, R2 = P + (High − Low), S2 = P − (High − Low), and further levels extend the range. For stocks the previous regular session usually supplies the data. Most charting tools, including the WrPro platform, plot these automatically, so you rarely calculate them by hand.

Traders treat the levels as potential support and resistance. Price holding above the central pivot suggests intraday bullish bias, and below it bearish bias. Common tactics include looking for bounces or rejections at S1/R1, and breakouts through them toward the next level as targets. Pivots work best combined with trend, volume or candlestick confirmation. They mark probable zones only, so use stops, since price can slice straight through any level, especially around news.

The maths is identical, but the inputs differ. Forex trades nearly 24 hours, so where the session opens and closes is somewhat arbitrary and pivots often use a fixed daily cut. Stocks and indices have defined exchange hours plus opening auctions and gaps, so the prior session is cleaner to define, and overnight gaps can open price far from the pivots. Liquidity concentrated in the cash session also makes the levels more reactive intraday.

The central pivot is the key reference, acting as the intraday bias line. S1 and R1 are the most-watched and most-tested, since price often reaches them within a session. S2/R2 and beyond mark stronger extremes used as stretch targets or reversal zones on trending days. Because many traders watch the same levels, reactions can be self-reinforcing, but that also makes them prone to false breaks, so always confirm and manage risk.

Pivot points can be useful because they are objective, widely followed and highlight areas where reactions often cluster, which can become partly self-fulfilling. However, they are derived from past prices and offer no guarantee that any level will hold. They work best as one input within a broader plan alongside trend and volume, not as standalone signals. With leveraged CFDs on stocks or indices, always define your risk regardless of the level.