Pivot points (standard, Fibonacci, Camarilla, Woodie)

What it is

Pivot points are an old floor-trader method: take the previous period's high (H), low (L) and close (C) and work out levels for today. The standard pivot is P = (H + L + C) ÷ 3. Then R1 = 2P − L, S1 = 2P − H, R2 = P + (H − L) and S2 = P − (H − L).

Variants weight things differently. Fibonacci pivots put the levels at P ± 0.382, 0.618 and 1.0 times the range. Camarilla levels sit close to the close: C ± (H − L) × 1.1 ÷ 12, 6, 4 and 2. Woodie's pivot gives the close extra weight: P = (H + L + 2C) ÷ 4. The central pivot range (CPR) adds two lines either side of the pivot, from (H + L) ÷ 2 and 2P minus that.

How to spot it

• Most platforms draw them automatically for the day, week or month.
• Price above the pivot is often read as a bullish day, below as bearish.

How to use it

• Use R1 and S1 as first targets or reversal areas in a range day.
• Treat a narrow CPR as a sign a trending day may be more likely.

Common mistakes

• Using forex pivots built from a different daily close than your broker's.
• Expecting every level to hold.

Related