The pivot point is a powerful technical analysis indicator used to assess the overall sentiment in the market during different time frames. It is a very popular tool in both the currency and stock markets. The traders can easily identify key support and resistance levels where the price may bounce, rebound, or breakthrough. A breach above the pivot point line indicates bullish sentiment, whereas a breach below indicates bearish sentiment. The pivot point indicator boosts trader’s confidence to make educated decisions when entering and exiting the market.

Formula of Pivot Point

Pivot Point = (High+Low+Close)/3

Resistance 1 = (Pivot Point×2)-Low

Resistance 2 = Pivot Point + (High-Low)

Support 1 = (Pivot Point×2)-High

Support 2 = Pivot Point-(High-Low)