What are pivots & pivot points?

There are pivots and pivot points. These terms may mean different things to different people. A pivot means an important price level to a trader, like an inflection point, where they expect price to either continue in the current direction or reverse course. Some traders view prior high points or low points in the price as a pivot.

Why do traders use pivot points?

Traders can utilize pivot pointsto determine the overall market trend. The market is bullish if the pivot point price is broken in an upward movement. Alternatively, it is bearish if the price drops below the pivot point. By plotting pivot points, traders can decide when to open and close their positions in the market.

What are DeMark pivot points?

Demark pivot points: Demark pivot points begin with a different base and use a distinct formula for support and resistance. These pivot points are subject to the relationship between the opening and closing prices. This guide will delve into the most popular and widely used pivot point: the standard pivot point.

What is a level above a pivot point called?

Levels above the pivot point are calculated and called R1 and R2, with the R standing for Resistance. Levels below the pivot point are calculated and called S1 and S2, with S standing for Support. If the price moves below the pivot point it may continue to S1. If the price falls below S1, it may continue to S2.