Pivot Points: More Than One Way to Slice the Pie
The standard method of calculating pivot points is popular—but it’s not the only game in town.
Kind of like how BTS isn’t the only way to enjoy K-pop. (Where my BLACKPINK fans at? Annyeonghaseyo! 👋)
Over time, traders have developed alternative pivot point formulas in an effort to improve on the original. In this lesson, we’ll explore some of those other pivot point methods, and show you how to calculate them.
1. Woodie Pivot Points
Formula:
H = High, L = Low, C = Close
With the Woodie method, you’ll notice the pivot point calculation is different from the standard formula. It gives more weight to the previous day’s closing price, which some traders believe gives a better sense of market sentiment.
Here’s a chart of EUR/USD with Woodie pivot levels (solid lines) compared to standard pivot levels (dotted lines).
Because of the formula difference, the levels generated by Woodie can vary quite a bit from the standard ones. Some traders prefer Woodie pivots for their emphasis on the close, while others stick to the standard version simply because more traders use it — which can make it a self-fulfilling prophecy.
Either way, support and resistance can flip roles, so whichever method you use, keep an eye on those levels!
2. Camarilla Pivot Points
Formula:
The Camarilla method is similar to Woodie’s in that it uses the previous day’s close and range, but it calculates eight levels (four resistance, four support) with multipliers applied to the range.
The basic idea? Price tends to revert to the mean — meaning it often returns to the previous day’s close.
So:
-
You consider buying at S3 or selling at R3
-
But if price breaks through S4 or R4, it suggests a strong trend — and that’s when you might want to jump in and ride the momentum
Check out this chart to see how Camarilla levels (solid lines) differ from standard ones (dotted lines). You’ll notice that:
-
More importance is placed on the closing price
-
Sometimes resistance levels can fall below the pivot point, and support levels can rise above it
3. Fibonacci Pivot Points
Formula:
Fibonacci pivot points start with the standard pivot point formula. Then, you use Fibonacci ratios (38.2%, 61.8%, and 100%) to calculate support and resistance levels by multiplying them with the range (High – Low).
Why use this method?
Well, Fibonacci ratios are already widely used by traders for retracements, extensions, and other technical levels. So why not use them in pivot points too?
Here’s a chart comparing Fibonacci pivot levels (solid lines) with the standard ones (dotted lines). Since many traders watch Fibonacci levels, they too can become self-fulfilling.
So… Which Pivot Point Method Is Best?
The honest answer? There’s no single best method.
Just like with other technical tools, the effectiveness of pivot points depends on how you use them and what you combine them with — whether it’s price action, candlestick patterns, or other indicators.
That said, most trading platforms default to the standard method when calculating pivot points automatically.
But now that you know how to calculate all these variations yourself, feel free to test them out and see which one fits your trading style.
Pivot away! 🔄