How to Find Stock Pivot Points

To calculate a stock pivot point, use this formula:

Pivot Point (P)=High+Low+Close3\text{Pivot Point (P)} = \frac{\text{High} + \text{Low} + \text{Close}}{3}

From this central pivot, support and resistance levels are calculated as:

• First resistance (R1) = 2×P−Low2 \times P - \text{Low}
• First support (S1) = 2×P−High2 \times P - \text{High}
• Second resistance (R2) = P+(High−Low)P + (\text{High} - \text{Low})
• Second support (S2) = P−(High−Low)P - (\text{High} - \text{Low})

Many traders use stock pivot point calculators or spreadsheet programs like Excel to automate these calculations.

Using Pivot Points in Trading Strategies

Pivot points are widely used across timeframes—from daily to intraday charts. They help traders spot key levels where price may pause, reverse, or break out.

Two common strategies include:

1. Trading Reversals: If price moves above or below the pivot point but then reverses near it, traders may enter trades expecting the price to revert to the pivot.
2. Trading Breakouts: A decisive break beyond support or resistance pivot levels may signal the start of a new trend.

Using pivot points together with other indicators, such as Japanese candlestick patterns or volume-based tools like the Volume Price Trend (VPT) indicator, improves accuracy.

Why Use Stock Pivot Points?

• They provide objective support and resistance levels widely followed by retail and institutional traders.
• Pivot points are particularly useful for range-bound markets but also help in breakout identification.
• Alerts can be set on trading platforms (like Finviz) to notify traders when prices approach these critical levels.

Summary

Mastering the stock pivot point and knowing how to find stock pivot points equips traders with a reliable framework for analyzing market sentiment and key price levels. Combine pivot point analysis with volume and candlestick confirmation to enhance your trading edge. Use PROP365 to integrate advanced pivot point strategies with powerful trading tools and maximize your performance.