A pivot is an important price level known in advance that traders consider important and can make trading decisions around this level. As a technical indicator, a central price is similar at a resistance or support level. In case of exceedance of the pivot level, the price should continue in this direction. Intraday traders use different analyses to help them make their trading decisions. A pivot point is one such calculation. It is a tool for technical analysis that allows a trader to determine the general trend of the market at different times. The various levels within the pivot point can help you detect points where the price of this action might face support or resistance. The direction of price movement may also be detected when the price moves across some of these levels. These levels only apply to day trading. There are a variety of formulas you can use to learn about pivot levels.

Pivots are technical analysis indicators, or calculations used to determine the overall trend of the market over different time frames. In reality, pivot points are simply the average of the intraday high and low, along with the previous day's closing price. The following day, trading above the pivot point indicates continuing bullish sentiment, while trading below the pivot point indicates the bearish sentiment.

Pivots refer to a significant level of price known in advance that traders view as important in making trading decisions. The pivot price functions like a resistance level or support level in technical analysis. As long as the pivot level is exceeded, the price is likely to continue in that direction.Pivots are important price levels that traders consider inflection points, where they expect the price to continue in the same direction or reverse it. Prior high points or low points in the price are often considered pivot points by traders.

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Question -

What are pivots?

6 Answer

Ryan Childers

Answered 2 years ago

Pivots are technical analysis indicators that are used to identify potential support and resistance levels in the market. They are calculated based on the high, low, and closing prices of the previous trading session.There are two main types of pivots:<ul style="margin-bottom:0cm;" type="disc"><li style="margin-top:0cm;margin-right:0cm;margin-bottom: 7.5pt;margin-left:0cm;line-height:normal;font-size:15px;font-family:"Calibri",sans-serif;color:#1F1F1F;background:white;">Central pivot point (CPP): The CPP is calculated by averaging the high, low, and closing prices of the previous trading session.</li><li style="margin-top:0cm;margin-right:0cm;margin-bottom: 7.5pt;margin-left:0cm;line-height:normal;font-size:15px;font-family:"Calibri",sans-serif;color:#1F1F1F;background:white;">Pivot points: Pivot points are calculated above and below the CPP using a series of mathematical formulas. The most common pivot point levels are the R1, R2, R3, S1, S2, and S3 levels.</li></ul>Pivot points are often used by traders to identify potential entry and exit points for trades. For example, a trader might buy a stock when it reaches its S1 support level, with the goal of selling it when it reaches its R1 resistance level.Pivot points can also be used to identify potential trend reversals. For example, if a stock is in a downtrend and breaks above its R1 resistance level, this could be a signal that the trend is reversing and that the stock is about to start moving higher.Here is an example of how to calculate the CPP and pivot points for a stock:Suppose the high, low, and closing prices of a stock for the previous trading session were $100, $95, and $98, respectively.To calculate the CPP, we would simply average the high, low, and closing prices:CPP = (100 + 95 + 98) / 3 = 97.33To calculate the pivot points, we would use the following formulas:R1 = CPP + (high - low) = 97.33 + (100 - 95) = 102.33R2 = R1 + (R1 - CPP) = 102.33 + (102.33 - 97.33) = 107.33R3 = R2 + (R2 - R1) = 107.33 + (107.33 - 102.33) = 112.33S1 = CPP - (high - low) = 97.33 - (100 - 95) = 92.33S2 = S1 - (S1 - CPP) = 92.33 - (92.33 - 97.33) = 87.33S3 = S2 - (S2 - S1) = 87.33 - (87.33 - 92.33) = 82.33The resulting pivot points would be as follows:<ul style="margin-bottom:0cm;" type="disc"><li style="margin-top:0cm;margin-right:0cm;margin-bottom: 7.5pt;margin-left:0cm;line-height:normal;font-size:15px;font-family:"Calibri",sans-serif;color:#1F1F1F;background:white;">R3: 112.33</li><li style="margin-top:0cm;margin-right:0cm;margin-bottom: 7.5pt;margin-left:0cm;line-height:normal;font-size:15px;font-family:"Calibri",sans-serif;color:#1F1F1F;background:white;">R2: 107.33</li><li style="margin-top:0cm;margin-right:0cm;margin-bottom: 7.5pt;margin-left:0cm;line-height:normal;font-size:15px;font-family:"Calibri",sans-serif;color:#1F1F1F;background:white;">R1: 102.33</li><li style="margin-top:0cm;margin-right:0cm;margin-bottom: 7.5pt;margin-left:0cm;line-height:normal;font-size:15px;font-family:"Calibri",sans-serif;color:#1F1F1F;background:white;">CPP: 97.33</li><li style="margin-top:0cm;margin-right:0cm;margin-bottom: 7.5pt;margin-left:0cm;line-height:normal;font-size:15px;font-family:"Calibri",sans-serif;color:#1F1F1F;background:white;">S1: 92.33</li><li style="margin-top:0cm;margin-right:0cm;margin-bottom: 7.5pt;margin-left:0cm;line-height:normal;font-size:15px;font-family:"Calibri",sans-serif;color:#1F1F1F;background:white;">S2: 87.33</li><li style="margin-top:0cm;margin-right:0cm;margin-bottom: 7.5pt;margin-left:0cm;line-height:normal;font-size:15px;font-family:"Calibri",sans-serif;color:#1F1F1F;background:white;">S3: 82.33</li></ul>Traders can use these pivot points to identify potential support and resistance levels, as well as potential entry and exit points for trades.

What are pivots?

6 Answer

6 Answer

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