Pivot Point
Definition of 'Pivot Point'A technical analysis indicator used to determine the overall trend of the market over different time frames. The pivot point itself is simply the average of the high, low and closing prices from the previous trading day. On the subsequent day, trading above the pivot point is thought to indicate ongoing bullish sentiment, while trading below the pivot point indicates bearish sentiment. |
|
Investopedia explains 'Pivot Point'A pivot point analysis is often used in conjunction with calculating support and resistance levels, similar to a trend line analysis. In a pivot point analysis, the first support and resistance levels are calculated by using the width of the trading range between the pivot point and either the high or low prices of the previous day. The second support and resistance levels are calculated using the full width between the high and low prices of the previous day. |
|
Related Definitions
Articles Of Interest
-
Using Pivot Points For Predictions
Learn one of the most common methods of finding support and resistance levels. -
Pivot Points
Learn more about this technical indicator and how you can use it as a predictive tool. -
Using Pivot Points In Forex Trading
Learn to combine this powerful tool with traditional technical tools for greater returns. -
Pivot Strategies: A Handy Tool For Forex Traders
Make more educated trading decisions by identifying major turning points. -
Sell Growth Stocks The IBD Way
Savvy investing is all about learning some smart rules and sticking to them. We give you the rundown. -
Candle Sheds More Light Than The MACD
Read the case against this well-established indicator. -
Tales From The Trenches: The Rising Wedge Breakdown
Learn how to short this reversal pattern with a favorable risk/reward ratio. -
How do I calculate forex pivot points?
Pivot points were originally developed by floor traders in the equity and commodity exchanges. They are calculated based on the high, low and closing prices of previous trading sessions, and ... -
Gauging The Strength Of A Market Move
Learn how to apply the ACD technique to a longer time horizon. -
Find A Trend With The Partial Retrace
Learn how to spot the pivot point from which a new movement will emerge.
Free Annual Reports