Calculation
Several methods exist for calculating the pivot point (P) of a market. Most commonly, it is the arithmetic average of the high (H), low (L), and closing (C) prices of the market in the prior trading period:
- P = (H + L + C) / 3.
Sometimes, the average also includes the previous period's or the current period's opening price (O):
- P = (O + H + L + C) / 4.
In other cases, traders like to emphasize the closing price, P = (H + L + C + C) / 4, or the current periods opening price, P = (H + L + O + O) / 4.
Read more about this topic: Pivot Point
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