Calculating and Charting Pivot Points, Support, and Resistance
Summary
The article describes pivot points as daily reference levels that traders may interpret as directional guides: price above a pivot is associated with upward bias, and price below it with downward bias. It outlines a classical calculation using the previous period’s high, low, and close, then derives first support and resistance by adding or subtracting the prior range. It also presents analyst-published pivot, support, and resistance levels across several currency pairs, including an example of intraday commentary around those levels.
The practical focus is drawing the pivot and surrounding levels on a MetaTrader chart, with separate horizontal lines and labels for each level. The article offers no backtest or evidence that these levels predict returns; it explains a charting convention and implementation. Its example uses historical market commentary, and the text notes that pivot formulas can vary, so calculated levels may differ from externally published ones. Traders would need to specify their period, price source, and interpretation before evaluating the method.
Key ideas
- A classical daily pivot is calculated from the prior period’s high, low, and close.
- Support and resistance levels can be constructed around the pivot using the prior range.
- Analyst commentary may provide pivot and surrounding levels alongside a broader market view.
- Chart objects can display each level as a separate horizontal line with a label.
- The document presents no performance test, and pivot formulas may differ between sources.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.