Know the 3 Other Types of Pivot Points

Standard method of calculating pivot points seems to be mentioned more often, But this is not the only type of pivot points that are existing. There are three other types to it as well. In this lesson, we shall cover the four different types of pivot points that exist. Similar to listening to BTS is not the only way to listen to K-pop.

Traders have worked on improving the original pivot point and which resulted in having other ways to calculate for pivot points.

Woodie Pivot Point

Now let‘s turn our attention to Woodie’s Pivot Points. Woodies Pivot Points are calculated as per below:

R2 = PP + High – Low

R1 = (2 X PP) – Low

PP = (H + L + 2C) / 4

S1 = (2 X PP) – High

S2 = PP – High + Low

C – Closing Price, H – High, L – Low

As you may have noticed the Woodies Pivot calculation is quite different than the standard pivot points formula. One of the main differences is that the Woodie‘s formula puts more weight on the closing price. Also, in order the calculate the corresponding support and resistance levels, you would use the difference between the previous day’s high and low, otherwise called as the range.

Below is a chart example of the Woodie pivot point calculation applied on EURUSD.

In the The Woodie pivot point method, the support levels, and resistance levels are the massive lines and the dotted one represent the levels calculated through the std. method.

Due to the availability of different formulas, levels found through the Woodie calculations are very different from those established through the std. method. Some traders choose to use the Woodie formulas instead because they give more weight to the closing price of the past period. While Others prefer the standard formulas because many traders make use of those, which could make them self-fulfilling.

But no matter what, as the resistance turns into support (and vice versa), if you decide to use the Woodie formulas, you should keep an eye on these levels as they could become areas of interest. Whatever floats your boat!

Camarilla Pivot Point

R4 = C + ((H-L) x 1.5000)

R3 = C + ((H-L) x 1.2500)

R2 = C + ((H-L) x 1.1666)

R1 = C + ((H-L) x 1.0833)

PP = (H + L + C) / 3

S1 = C – ((H-L) x 1.0833)

S2 = C – ((H-L) x 1.1666)

S3 = C – ((H-L) x 1.2500)

S4 = C – ((H-L) x 1.5000)

C – Closing Price, H – High, L – Low

If we look closely, we can infer that the support and resistance levels are calculated using the range and the close price similar to the Woodie calculation. The only major difference being, in Camarilla, four levels of Support and Resistance is calculated and is multiplied by a multiplier.

The main concept of Camarilla pivot points is that it is based on the idea that price has a reasonable likelihood to revert back to the mean (sound familiar？), or in this situation, the past days close. The idea is that you should buy or sell when the price reaches either the third support or resistance level.

That said, if the price were to burst through S4 or R4, it would mean that the intraday trend is powerful, and it‘s about time you jump on that bandwagon!, Check out how the Camarilla calculation gives various levels contrast to the std. method’s levels (dotted lines)!

As you can spot from the chart above, more emphasis is given to the closing price as against to the pivot point. For this reason, its possible that resistance levels could be below the pivot point or support levels could be above it. Now you understand how all the support and resistance levels are above the Camarilla pivot point？ Good

Fibonacci Pivot Point

R3 = PP + ((High – Low) x 1.000)

R2 = PP + ((High – Low) x .618)

R1 = PP + ((High – Low) x .382)

PP = (H + L + C) / 3

S1 = PP – ((High – Low) x .382)

S2 = PP – ((High – Low) x .618)

S3 = PP – ((High – Low) x 1.000)

C – Closing Price, H – High, L – Low

For calculating Fibonacci level, the pivot point level is calculated using the traditional method. Then the Support and Resistance levels are obtained by finding the product of the previous day‘s range and the corresponding Fib level. The most used Fib levels are 38.2%, 61.8%, and 100%. Finally, adding/subtracting this value with the pivot point yields the Support and Resistance levels. Finally, add or subtract the figures you get to the pivot point and voila, you’ve got your Fibonacci pivot point levels, simple.

Take Look at the chart below to see how the levels calculated through the Fibonacci method differ from those calculated through the standard method (dotted lines).

The clue behind this is that many traders like using the Fibonacci ratios. People use it for retracement levels, moving averages, etc. You too can try to use it for pivot points also. Recall that both Fibonacci and pivot point levels are used to find support and resistance. With so much traders taking note of these levels, they can surely become self-fulfilling.

Now that we have listed and explained the types of pivot point levels, perhaps you can say which one is the best.？

Honestly, similar to all the variations of all the other indicators that youve learned so far, there is no single best method. Basically it all depends on how you puts together your knowledge of pivot points with all the other tools in your trading toolbox. Just get to understand that most charting software that gives automatic calculations mostly use the standard way in finding the pivot point levels.

Finally, now that you have fully understand other ways to calculate these levels, it is left for you to give them try all and find out which one works best for you and gives you good results.