Forex glossary
Pivot Points
Pivot points are calculated reference levels for support and resistance. A common version uses P = (H+L+C)/3 from the prior period, with further levels derived from separate formulas that are not always symmetric. Variant, session boundaries and price data affect values; they do not verify actual order concentrations.
Illustrative example
How does it work in practice?
Assume H is 110, L is 100 and C is 108. Pivot P is 106, with classic R1 at 112 and S1 at 102; their distances from P are six and four respectively.
A case to work through
Unequal distances
Hypothetically, prior H=90, L=72 and C=84.
- P=(90+72+84)/3=82; R1=2×82−72=92 and S1=2×82−90=74.
- Their distances are 10 and 8, so they are not symmetric around P.
What follows? Record the formula variant and session boundaries with the result.
Example boundary: These are calculations rather than evidence of orders at those prices.
A useful distinction
Pivot Points / Support and Resistance
Pivot points calculate formula-based levels; support and resistance can be zones identified from previous reactions.
Check your understanding
Compare classic R1 and S1 distances from P.
Show the answer and explanation
54
(60+48+54)/3=54.
From observations to price structure
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Read the fuller explanation
Related terms
Sources and documentation
- TradingView – Pivot Points
P, R1 and S1 formulas and variant/session settings; distances need not be symmetric.
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The example illustrates the mechanism. Check current account conditions and instrument specifications with the provider.