What is a pivot point?

The pivot point itself is the primary support and resistance when calculating it. This means that the largest price movement is expected to occur at this price. The other support and resistance levels are less influential, but may still generate significant price movements. Pivot points can be used in two ways.

What are standard pivot points?

Standard pivot points are the most basic pivot points that day traders can calculate. First, traders start with a base pivot point. That’s the average of the high, low, and close from a previous period. Below is the complete calculation for standard pivot points. 2. Fibonacci Pivot Points (The Most Popular)

How do you use a pivot point?

S1, S2, R1, and R2 can be used as target prices for such trades as well as for stop-loss levels. Combining pivot points with other trend indicators is common practice for traders. A pivot point that also overlaps or converges with a 50-period or 200-period moving average (MA) or Fibonacci extension level becomes a stronger support/resistance level.