# Calculating Pivot Point (1)

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## Calculating Pivot Point (1)

Pivot Points – Technical Analysis

In the previous article, we’ve introduced what pivot levels are and their usefulness. Well, next is how to calculate the pivot level quite easily. You need the highest, lowest, and previous period’s closing data. The most widely used method is called the classic floor trader method, which uses the highest, lowest, and closing rates for the previous period. There are also methods that take into account the opening price for the previous period or the opening price for the current period.

Pivot Points – Technical Analysis

### Classic Method of Floor Trader

The classical pivot level is the most commonly used pivot level and depends on the previous high, low and close price to calculate the main pivot level using the formula:

PP = (Prev High + Prev Low + Prev Close) / 3

Other levels such as support levels (S1, S2, S3) and resistance levels (R1, R2, R3), are calculated then based on the main pivot (PP), High, Low and Range levels (High-Low difference).

### Woodie Pivot Level Method

The Woodie Pivot Level method is similar to the classical pivot level with the exception that Woodies ignores the close price of the previous period and gives a greater meaning to the current (current) open price. Thus, the formula used to calculate the main pivot level using the Woodie pivot method is:

PP = (Prev High + Prev Low + (2 x Open Current)) / 4

The level of resistance and other support is calculated the same as in the classic floor trader method.

Pivot Points – Technical Analysis

### Level Pivot Camarilla

The Camarilla pivot method was developed in 1989 by a successful bond trader named Nick Stott. Like the classical pivot method, the Camarilla method also uses the average high, low and close prices of the previous day to calculate the main pivot level. It is:

PP = (Prev High + Prev Low + Prev Close) / 3

However, other levels (support and resistance) are calculated using the close and range (high-low) prices for the previous period. From the other levels, the most significant levels are the R3 and R4 levels, as well as the S3 and S4 levels.

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