Calculate key support and resistance levels from the previous session.
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Overview
Pivot Points are one of the oldest and most widely used technical analysis tools, predating the computer era — floor traders in futures pits calculated them by hand each morning. The central pivot (P) is the average of the prior session's high, low, and close. From that single level, support levels (S1, S2, S3) and resistance levels (R1, R2, R3) are derived mathematically.
The key insight is that because so many participants are watching the same levels, those levels often become self-fulfilling. Price tends to react at pivot levels not necessarily because of fundamental value, but because of the concentration of buy and sell orders placed there.
Standard pivots are calculated daily, but weekly and monthly pivots are used by swing and position traders for longer timeframes. Camarilla pivots and Woodie's pivots are popular variants that weight the close more heavily, producing tighter intraday levels preferred by scalpers.
Pivot points are especially effective in range-bound markets where price oscillates between support and resistance. In trending markets, price often runs through levels — but even then, pauses and consolidations frequently occur at pivot lines, offering entry opportunities.
Strategy Code
This is a TradingView Pine Script example for this indicator. Paste it into the TradingView Pine Editor, add it to your chart, and adjust inputs for your market and timeframe.
//@version=6
strategy("Pivot Points", overlay=true)
fastLen = input.int(20, "Fast Length")
slowLen = input.int(50, "Slow Length")
fast = ta.ema(close, fastLen)This is a thinkorswim ThinkScript example for this indicator. Open thinkorswim, create a custom study, paste the script, and apply it to your chart.
def pivot = (high[1] + low[1] + close[1]) / 3;
def buySignal = close crosses above pivot;
def sellSignal = close crosses below pivot;
AddOrder(OrderType.BUY_AUTO, buySignal, close, 1, Color.GREEN, Color.GREEN, "Pivot Buy");
AddOrder(OrderType.SELL_AUTO, sellSignal, close, 1, Color.RED, Color.RED, "Pivot Exit");Join thousands of traders who use auto-Trading to execute this strategy automatically, 24/7.
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