How to Calculate Pivot Points

How to Calculate Pivot Points

There are several different methods for calculating pivot points, the
most common of which is the five-point system. This system uses the
previous day's high, low and close, along with two support levels and
two resistance levels (totaling five price points) to derive a pivot
point. The equations are as follows:

R2 = P + (H - L) = P + (R1 - S1)

R1 = (P x 2) - L

P = (H + L + C) / 3

S1 = (P x 2) - H

S2 = P - (H - L) = P - (R1 - S1)

Here, "S" represents the support levels, "R" the resistance levels and
"P" the pivot point. High, low and close are represented by the "H",
"L" and "C" respectively. (Note that the high, low and close in
24-hour markets [such as forex] are often calculated using New York
closing time [4:00 p.m. EST] on a 24-hour cycle. Limited markets [such
as the NYSE] simply use the high, low and close from the day's
standard trading hours.)