1. What is Pivot Point?

The Pivot Point is a technical analysis indicator used to determine overall market trends and potential support/resistance levels. It's calculated as the average of the high, low, and closing prices from the previous trading day.

2. How Does the Calculator Work?

The calculator uses the standard pivot point formula:

Where:

• \( H \) — Previous day's high price
• \( L \) — Previous day's low price
• \( C \) — Previous day's closing price

The calculator also computes standard support and resistance levels (R1, S1, R2, S2, R3, S3) based on the pivot point.

3. Importance of Pivot Points

Details: Pivot points are widely used by traders to identify potential reversal points, support/resistance levels, and overall market direction. They are particularly useful in day trading and short-term trading strategies.

4. Using the Calculator

Tips: Enter the previous day's high, low, and closing prices. The calculator will compute the pivot point and standard support/resistance levels. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What time frame should I use for pivot points?
A: Daily pivot points are most common, using the previous day's high, low, and close. However, they can be calculated for any time frame.

Q2: How do traders use pivot points?
A: Traders watch for price action around pivot levels - buying near support levels and selling near resistance levels, with the pivot point often acting as a key decision point.

Q3: Are there different types of pivot point calculations?
A: Yes, besides the standard method shown here, there are also Fibonacci, Woodie's, and Camarilla pivot point variations.

Q4: Do pivot points work for all markets?
A: They work best in liquid markets with good volume (stocks, forex, futures). They may be less reliable in illiquid markets.

Q5: Should pivot points be used alone?
A: For best results, combine pivot points with other technical indicators and price action analysis for confirmation.