There are other variations of Pivot Points used by investors, but they all derive support and resistance lines that are watched for trading opportunities. The above is the formula for calculating standard Pivot Points and it uses the High, Low and Close prices of the previous trading period. Here is the formula for calculating standard Pivot Points: The PP acts as a reference point and is used in the computation of the other lines. The standard Pivot Points indicator that is available on most trading platforms consists of 7 lines: 3 support lines (S1, S2 and S3), 3 resistance lines (R1, R2 and R3) and 1 Pivot Point (PP). When plotted, the Pivot Points indicator derives multiple support and resistance lines, which can help traders determine optimal entry and exit points in the market. These zones offer the best trading opportunities and clearly a reason why Pivot Points have passed the test of time and remain one of the most popular and effective technical analysis tools. Investors have always actively sought areas where an underlying asset can find demand or supply. Pivot Points have been used by investors since the early days of technical analysis to map out quality support and resistance zones in the market.
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