Technical & Chart AnalysisFloor PivotsClassic Pivots
Pivot Points
Support and resistance levels calculated mechanically from the previous session's high, low and close.
What Pivot Points means
Pivot points are support and resistance levels calculated mechanically from the previous session's price data, so every trader using the same formula and session definition sees identical lines. In the classic floor-trader version the central pivot is the average of the previous high, low and close. The first resistance is twice the pivot minus the previous low, the first support twice the pivot minus the previous high, and further levels extend outward from there. Camarilla, Woodie and Fibonacci variants apply different weightings to the same inputs.
Intraday traders use the central pivot as a rough sentiment divide, treating trade above it as constructive and below it as weak, and use the outer levels as reference points for targets and stops. The objectivity of the calculation is the main appeal, since no drawing judgement is involved. The complication in spot forex is that the market runs 24 hours, so the levels depend entirely on which daily close is used, and a New York 5pm close produces different pivots from a midnight GMT close on the same chart.
Worked example
With a previous USD/JPY session high of 152.80, low of 151.90 and close of 152.40, the pivot is 152.37, R1 is 152.83 and S1 is 151.93.
Related terms
- SupportA price area where buying interest has previously been strong enough to halt or reverse a decline.
- ResistanceA price area where selling interest has previously been strong enough to stop or reverse an advance.
- Day TradingA style in which all positions are opened and closed within the same trading day, leaving nothing open overnight.
- Range TradingBuying near the floor and selling near the ceiling of a sideways market, on the assumption the boundaries hold.
- Trading SessionOne of the regional periods - Sydney, Tokyo, London or New York - into which the continuous 24-hour forex day is divided.
Frequently asked questions
What does Pivot Points mean in forex trading?
Support and resistance levels calculated mechanically from the previous session's high, low and close.
How does Pivot Points work in practice?
Intraday traders use the central pivot as a rough sentiment divide, treating trade above it as constructive and below it as weak, and use the outer levels as reference points for targets and stops. The objectivity of the calculation is the main appeal, since no drawing judgement is involved. The complication in spot forex is that the market runs 24 hours, so the levels depend entirely on which daily close is used, and a New York 5pm close produces different pivots from a midnight GMT close on the same chart.
What is an example of Pivot Points?
With a previous USD/JPY session high of 152.80, low of 151.90 and close of 152.40, the pivot is 152.37, R1 is 152.83 and S1 is 151.93.
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