Pivot Points Trading Strategy: How to Calculate and Use Pivot Levels

Pivot points are one of the oldest and most reliable technical analysis tools used by floor traders and institutional investors. They provide objective support and resistance levels calculated from the previous period's price data.

What Are Pivot Points?

Pivot points are horizontal price levels calculated from the previous day's (or week's, or month's) high, low, and close. They create a central pivot (P) surrounded by support levels (S1, S2, S3) below and resistance levels (R1, R2, R3) above.

The beauty of pivot points is that they're leading indicators — you calculate them before the market opens, giving you a roadmap for the day ahead.

Classic (Floor Trader) Pivot Points

The most common formula, used by floor traders for decades:

Pivot (P) = (High + Low + Close) / 3

Fibonacci Pivot Points

Fibonacci pivots use the same central pivot but apply Fibonacci ratios to calculate support and resistance:

Camarilla Pivot Points

Camarilla pivots produce tighter levels, ideal for intraday scalping:

The levels are calculated using the range (High - Low) multiplied by specific Camarilla constants (1.1/12, 1.1/6, 1.1/4, 1.1/2). These produce very tight support and resistance zones that work well for mean-reversion strategies.

Woodie Pivot Points

Woodie's formula gives extra weight to the closing price:

Pivot (P) = (High + Low + 2 × Close) / 4

This makes Woodie pivots more responsive to the most recent price action.

How to Trade with Pivot Points

Strategy 1: Pivot Bounce

1. Price approaches a pivot level (P, S1, R1, etc.)
2. Look for a rejection candlestick pattern (pin bar, engulfing, doji)
3. Enter in the direction of the bounce
4. Stop loss beyond the pivot level
5. Target the next pivot level

Strategy 2: Pivot Breakout

1. Price breaks through a pivot level with strong momentum
2. Wait for a retest of the broken level
3. Enter in the direction of the breakout
4. Stop loss on the other side of the broken level
5. Target the next pivot level

Strategy 3: Opening Range + Pivots

1. Note where price opens relative to the central pivot
2. Above P: Bullish bias — look for longs at S1 or bounces off P
3. Below P: Bearish bias — look for shorts at R1 or rejections at P

Which Pivot Formula Should You Use?

Start with Classic pivots — they're the most widely used, which means more traders are watching the same levels, creating self-fulfilling prophecies.

Pivot Points on Different Timeframes

• Daily pivots: Most common, used for intraday trading
• Weekly pivots: Used for swing trading (calculated from the previous week's H/L/C)
• Monthly pivots: Used for position trading and identifying major levels

Higher timeframe pivots carry more weight and are watched by more institutional traders.

Try Our Free Pivot Point Calculator

Use our Pivot Point Calculator to instantly calculate Classic, Fibonacci, Camarilla, and Woodie pivot levels. Enter the previous period's high, low, and close to get all levels at once.

Plot Pivots on Professional Charts

TradingView has built-in pivot point indicators that automatically plot levels on your charts. Trade these levels with precision execution on Dominion Markets.

Track your pivot point trades in Apex Trade Lab and analyze which pivot levels give you the best win rate and risk-reward.