## Pivot Points

##### Categories

Pivot Points:

A pivot point is a technical analysis indicator used to determine the overall trend of a market over different time frames. It serves as a reference point for potential support and resistance levels.
The pivot point itself is calculated as the average of the intraday high, intraday low, and the closing price from the previous trading day.
Here are the key levels derived from the pivot point calculation:
Resistance 1 (R1): Calculated as 2 times the pivot point minus the previous day’s low.
Resistance 2 (R2): Obtained by adding the difference between the high and low of the previous day to the pivot point.
Support 1 (S1): Calculated as 2 times the pivot point minus the previous day’s high.
Support 2 (S2): Derived by subtracting the difference between the high and low of the previous day from the pivot point.
Traders use these levels to identify potential areas of price reversal or continuation. If the price moves through these levels, it provides insights into the prevailing trend direction
Woodie Pivot Points:
Woodie pivot points are an alternative variation of pivot points. They are named after their creator, Ken Wood, a futures trader.
The formulas for Woodie pivot points are as follows:
R1: (2 \times \text{Pivot}) – \text{Previous Low})
R2: (\text{Pivot} + (\text{High} – \text{Low}))
R3: (\text{High} + 2 \times (\text{Pivot} – \text{Low}))
S1: (2 \times \text{Pivot} – \text{Previous High})
S2: (\text{Current Pivot} – (R1 – S1))
S3: (\text{Low} – 2 \times (\text{High} – \text{Pivot}))
Woodie pivot points emphasize the importance of the previous day’s price action and are widely used by traders in various markets2.
Camarilla Pivot Points:
Camarilla pivot points were developed by trader Nick Stott and are designed to provide more levels of support and resistance.
These levels are based on the previous day’s price range and are calculated using specific formulas.
Camarilla pivot points include four support levels (S1 to S4) and four resistance levels (R1 to R4).