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Trends & Market Structure

What Is a Pivot Point

A pivot point is yesterday's high, low and close added together and divided by three, drawn as a line across today, with a first line above it (R1, twice the pivot minus the low) and a first line below (S1, twice the pivot minus the high). This paper works the three numbers from the euro's 7 October 2025, shows the idea as a plank balanced on a fulcrum, draws the lines across the next day's hourly chart, lays the three lines out as a ruler, and shows how to type each price exactly into a line on your platform.

Difficulty
Intermediate
Reading time
5 min
Pages
8
Reviewed by
Saman Rahbar

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Three numbers from one day

A pivot point is a price made from yesterday. On 7 October 2025 the euro against the dollar had a high of 1.17146, a low of 1.16477 and a close of 1.16562. Add the three and divide by three: 1.16728, the pivot for 8 October. Two more lines come with it. Double the pivot and take away yesterday's low: 1.16980, the first line above, called R1. Double it and take away the high: 1.16311, the first line below, called S1. All three are known before 8 October opens, and they do not move during it.

A plank on a fulcrum

The picture is a plank balanced on a fulcrum. Yesterday's low sits on one end, its high on the other, and its close somewhere between them; the fulcrum is where the three balance. That is the pivot: the average of the three prices, which is not the middle of the day. When the close is near the low, the balance point slides toward the low; near the high, toward the high. R1 and S1 are the low and the high reflected through that balance point.

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