Standard pivot points are calculated via daily high, low and close price of previous day. Calculation formula is well known and can be found all over the Internet.
Besides the standard one, three more methods developed, thus we have the four most popular methods to apply when it comes down to pivots.
1. Flour Pivot point – original method
2. Tom DeMark’s Pivot Points – based on Tom Demarks rules
3. Woodie’s Pivot Points – u kombinaciji sa woodies metodom
4. Camarilla Pivot Points
All these methods have a thing in common, the very heart of the original version and that are support and resistance levels. Original version of pivot point indicator, along with another three, calculates daily pivot including three support (S1, S2 and S3) and three resistance (R1, R2 and R3) levels. According to the pivot rules, these three levels are areas of either strong support or strong resistance, depending on the market circumstances. They can be used to open position at, take profit, or both.