The formula
P = (high + low + close) ÷ 3 · R1 = 2P − low · S1 = 2P − high
Where it comes from
Pivot points turn the previous period's range into a set of levels for the next one. The pivot is the average of high, low and close; the supports and resistances are reflections of the range around it. Nothing in the arithmetic predicts anything — the levels matter because enough people watch them.
How to work it out by hand
- Add the high, the low and the close, and divide by three
- R1 is twice the pivot minus the low; S1 is twice the pivot minus the high
- R2 and S2 add and subtract the full range from the pivot
- Camarilla and Woodie weight the same inputs differently
What is worth knowing
The three methods answer different questions. Traditional spreads the levels across the range and suits sessions with room to move. Camarilla clusters them tightly around the close and is built for fading moves inside a range, not for breakouts. Woodie double-weights the next open, which means it cannot be calculated until the market opens. What none of them do is forecast: they are self-fulfilling to the extent that other participants use the same levels, and that effect fades as fewer people watch a given method.