

Traders’ pivots, or pivot points, are technical analysis indicators calculated using the previous trading period’s high, low, and closing prices to identify potential support and resistance levels for the current trading session. The central pivot point is typically calculated as the average of these three values, with additional support levels (S1, S2, S3) projected below and resistance levels (R1, R2, R3) projected above using various formulas.
These levels are particularly useful because they provide objective, predetermined price points where traders anticipate potential reversals, breakouts, or increased trading activity.
Floor traders originally developed pivot points for quick intraday decision-making, but they’ve become widely adopted across different timeframes because they offer a systematic framework for identifying entry and exit points, setting stop-losses, and gauging overall market sentiment—when price is above the central pivot, sentiment is generally considered bullish, and bearish when below.
Their self-fulfilling nature also adds to their effectiveness, as many traders watching the same levels can create actual support and resistance through their collective actions at these price points.


Explanation of tutorial 220
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