PIVOTS POINTS

PIVOT POINT

Pivot Point is a technical indicators, pivot point is a method of calculating the support and resistance for a particular index/scrip for a particular time frame like daily, weekly or monthly basis. The pivot point changes at the end of every day for the next day depending on open, low, high & close values.

There are maily 4 types of Pivot Points :

1. Floor Pivot Points

2. Woodie's Pivot Points

3. Tom DeMark's Pivot Point

4. Camarilla Pivot Point

Floor Pivot Point:

Resistance Level 3 - Extreme bullish market condition generally created by news driven price shock. This is where a market is at an overbought condition and may offer a day trader a quick reversal scalp trade.

Resistance Level 2 - Bullish market price objective or target high number for a trading session. It generally establishes the high of a given time period. The market often sees significant resistance at this price level and will provide an exit target for long positions.

Resistance Level 1 - Mild bullish sessions or in consolidating trading periods, this often acts as the high of a given session. In a bearish market condition, prices will try to come close to this level but most times fail.

Pivot Point - This is the focal price level or the mean that is derived from the collective market data from the prior session's high, low and close. It is the strongest of the support and resistance numbers. Prices normally trade above or below this area before breaking in one direction or the other. As a general guideline, if the market opens above the primary pivot, be a buyer on dips. If the market opens below this level look to sell rallies.

Support Level 1 - Mild bearish to bullish projected low target number in light volume or low volatility sessions or in consolidating trading periods. Prices tend to reverse at or near this level in bullish market conditions but most times fall short of hitting this number.

Support Level 2 - Bearish market price objective or targeted low number. The market often sees significant support at or near this level in a bearish market condition and is a likely target level to cover shorts.

Support Level 3 - Extreme bearish market condition generally created by a news driven price shock. This level will act as the projected target low or support area. This is where a market is at an oversold condition and may offer a day trader a quick reversal scalp trade.

CALCULATING PIVOT POINTS

Resistance 3 = High + 2*(Pivot - Low)

Resistance 2 = Pivot + (R1 - S1)

Resistance 1 = 2 * Pivot - Low

Pivot = (High + Low + Close)/3

Support 1 = 2 * Pivot - High

Support 2 = Pivot - (R1 - S1)

Support 3 = Low - 2* (High - Pivot)