what is a pivot point 
a pivot point is a price level calculated from previous prices it s used to indicate potential areas of support or resistance that offer attractive reward to risk setups for trades the pivot point itself is simply the average of the intraday high and low and the closing price from the previous trading day trading above the pivot point on the subsequent day is thought to indicate ongoing bullish sentiment trading below the pivot point indicates bearish sentiment the pivot point is the basis for the indicator but it also includes other support and resistance levels that are projected based on the pivot point calculation all these levels help traders see where the price could experience support or resistance it lets the trader know that the price is trending in that direction if the price moves through these levels investopedia dennis madambathe formula for pivot pointsp high low close 3 r 1 p 2 low r 2 p high low s 1 p 2 high s 2 p high low where p pivot point r 1 resistance 1 r 2 resistance 2 s 1 support 1 s 2 support 2 begin aligned p frac text high text low text close 3 r1 p times 2 text low r2 p text high text low s1 p times 2 text high s2 p text high text low textbf where p text pivot point r1 text resistance 1 r2 text resistance 2 s1 text support 1 s2 text support 2 end aligned p 3high low close r1 p 2 lowr2 p high low s1 p 2 highs2 p high low where p pivot pointr1 resistance 1r2 resistance 2s1 support 1s2 support 2 