According to investopedia.com

**"pivot points"**is defined as "A set of indicators developed by floor traders in the commodities markets to determine potential turning points, also known as "pivots". Forex pivot points are calculated to determine levels in which the sentiment of the market could change from "bullish" to "bearish." Currency traders see pivot points as markers of support and resistance."Before we turn to learn the application of pivot point analysis in forex trading, we should learn the ways to calculate the pivot points. There are four popular ways to calculate pivot points. You can find the formulas to calculate pivot points in below.

**Standard Pivot Point**

The formulas to calculate pivot point, support and resistance levels under the standard method are as follows.

First resistance (R1) = (2 x PP) – Low

First support (S1) = (2 x PP) – High

**Pivot point (PP)**= (High + Low + Close) / 3

Second resistance (R2) = PP + (High – Low)

Second support (S2) = PP – (High – Low)

Third resistance (R3) = High + 2(PP – Low)

Third support (S3) = Low – 2(High – PP)

**Woodie Pivot Point**

The formulas to calculate pivot point, support and resistance levels under the woodie method are as follows.

Second resistance (R2) = PP + High – Low

First resistance (R1) = (2 X PP) – Low

**Pivot point (PP)**= (H + L + 2C) / 4

First support (S1) = (2 X PP) – High

Second support (S2) = PP – High + Low

C – Closing Price, H – High, L – Low

**Camarilla Pivot Point**

The formulas to calculate pivot point, support and resistance levels under the camarilla method are as follows.

Fourth resistance (R4) = C + ((H-L) x 1.5000)

Third resistance (R3) = C + ((H-L) x 1.2500)

Second resistance (R2) = C + ((H-L) x 1.1666)

First resistance (R1) = C + ((H-L) x 1.0833)

**Pivot point (PP)**= (H + L + C) / 3

First support (S1) = C – ((H-L) x 1.0833)

Second support (S2) = C – ((H-L) x 1.1666)

Third support (S3) = C – ((H-L) x 1.2500)

Fourth support (S4) = C – ((H-L) x 1.5000)

C – Closing Price, H – High, L – Low

**Fibonacci Pivot Point**

The formulas to calculate pivot point, support and resistance levels under the fibonacci method are as follows.

Third resistance (R3) = PP + ((High – Low) x 1.000)

Second resistance (R2) = PP + ((High – Low) x .618)

First resistance (R3) = PP + ((High – Low) x .382)

**Pivot point (PP)**= (H + L + C) / 3

First support (S2) = PP – ((High – Low) x .382)

Second support (S2) = PP – ((High – Low) x .618)

Third support (S2) = PP – ((High – Low) x 1.000)

C – Closing Price, H – High, L – Low

**Which pivot point method is best ?**

I personally prefer standard pivot point method, but it does not mean that you will do the same. Apply the all of the pivot points in you forex trading and find the best one for you.

Pivot point will enrich your trading strategy, if it is applied with other technical tools, fundamental and sentiment analysis.

In my next post I will write about trading range and breakouts with pivot points. If you have any question regarding pivot point calculation you can drop a comment below.

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