Pivot Point
A calculated average of the prior period's high, low, and close used as a benchmark level for the current session.
PP = (High + Low + Close) / 3 R1 = 2×PP − Low; S1 = 2×PP − High R2 = PP + (High − Low); S2 = PP − (High − Low)
A Pivot Point is the arithmetic mean of the previous period's high, low, and close. It acts as a neutral reference: price above the pivot is considered bullish for the session; below it is bearish. The formula also derives support (S1, S2, S3) and resistance (R1, R2, R3) levels.
Floor traders popularised pivots as intraday anchors. They remain widely used on intraday and daily timeframes by professional traders. Price often gravitates toward the pivot mid-session in low-momentum environments.