Pivot points and CPR: formulas and how intraday traders use them

Pivot points are levels calculated from the previous trading session's high, low and close. Many intraday traders mark them on the chart before the market opens. They are arithmetic, not forecasts.

Floor pivot formulas

Using the previous day's high (H), low (L) and close (C):

• Pivot (P) = (H + L + C) ÷ 3
• Resistance 1 (R1) = 2 × P − L
• Support 1 (S1) = 2 × P − H
• Resistance 2 (R2) = P + (H − L)
• Support 2 (S2) = P − (H − L)
• Resistance 3 (R3) = H + 2 × (P − L)
• Support 3 (S3) = L − 2 × (H − P)

The central pivot range (CPR)

The CPR is a band around the pivot made of three lines: the pivot, the bottom central pivot (BC) and the top central pivot (TC).

• Midpoint = (H + L) ÷ 2
• The mirror of the midpoint across the pivot = (P − midpoint) + P
• TC is the higher of the midpoint and the mirror, and BC is the lower of the two.

Tradingraph orders the two lines this way so that TC is always the upper edge, even when the close is below the day's midpoint.

An example

Say the previous session had H = 22,600, L = 22,400 and C = 22,500. P = (22,600 + 22,400 + 22,500) ÷ 3 = 22,500. The midpoint is 22,500. The mirror is (22,500 − 22,500) + 22,500 = 22,500. So the CPR collapses into a single line at 22,500, which is the narrowest possible range.

Narrow and wide CPR

The width of the CPR is TC minus BC. A narrow CPR means the previous close was near the middle of the day's range. Some traders expect a narrow CPR to be followed by a trending day, and a wide CPR by a range-bound day. This is a rule of thumb, not a law. Tradingraph calls a CPR narrow when its width is below 0.2% of the pivot.

How these levels are used

• As reference points to plan entries, targets and stops.
• To see whether the market opens above, inside or below the CPR.

What they are not

Pivot levels do not predict where the market will turn. They are used because many traders watch the same numbers. Treat them as reference levels and always combine them with your own risk limits.

This page is for information and education only and is not trading advice.