Pivot Point Calculator

This tool is designed for traders looking to calculate pivot points and enhance their trading strategies. By providing the high, low, and close values of a stock, traders can determine potential support and resistance levels.

Data Source and Methodology

All calculations are based on the standard pivot point formula used in financial trading. For further information, please refer to authoritative financial textbooks and resources.

The Formula Explained

Pivot Point: \( \frac{\text{High} + \text{Low} + \text{Close}}{3} \)

Resistance 1: \( (2 \times \text{Pivot}) - \text{Low} \)

Support 1: \( (2 \times \text{Pivot}) - \text{High} \)

Resistance 2: \( \text{Pivot} + (\text{High} - \text{Low}) \)

Support 2: \( \text{Pivot} - (\text{High} - \text{Low}) \)

Glossary of Terms

High: The highest price of the stock for the given period.
Low: The lowest price of the stock for the given period.
Close: The closing price of the stock for the given period.
Pivot Point: The central pivot point, calculated as the average of high, low, and close.
Resistance: A price level that a stock struggles to surpass.
Support: A price level that a stock struggles to fall below.

Frequently Asked Questions (FAQ)

What are pivot points in trading?

Pivot points are technical analysis indicators used to determine the overall trend of the market over different time frames.

How are pivot points used in trading?

Traders use pivot points to identify potential support and resistance levels in the market.

How accurate are pivot points?

While pivot points are a useful tool, they should be used in conjunction with other indicators for better accuracy.

Can pivot points be used in all markets?

Yes, pivot points can be applied to any financial market, including stocks, forex, and commodities.

Do pivot points work in real-time?

Pivot points are typically calculated using daily data, but they can be adapted for intraday trading.