Pivot Points

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Pivot Points are those price levels that are most likely to act as levels of support and resistance on any given trading day. As we already know, Technical Analysis works because many people use it. For the same reason, the most influential Pivot Points are those that are used by majority of traders. The most widely used formula for calculating Pivot Points is as follows:

H = previous day's high
L = previous day's low
C = previous day's close


Pivot Point PP = (H + L + C)/3

First area of resistance = R1 = 2PP - L
First area of support = S1 = 2PP - H
Second area of resistance = R2 = PP + H - L
Second area of support = S2 = PP - H + L

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acty

High previous day's :0.42
previous day's low :0.38
previous day's close: 0.4
Pivot Point PP = (H + L + C)/3
=(0.42 + 0.38 +0.4)/3
= 0.4
First area of resistance = R1 = 2PP - L
= R1= 2*0.4 -0.38
=R1= 0.42

First area of support = S1 = 2PP - H
=S1= 2*0.4-0.42
=S1=0.38

Second area of resistance = R2 = PP + H - L
= R2 = 0.4+0.42-0.38
= R2 =44

Second area of support = S2 = PP - H + L
= S2 = 0.4-0.42+0.38
= S2 =0.36