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1994issue C081-5

Building a five-level daily pivot grid

A daily pivot is the mean of the prior session high, low, and settlement and is the input to four further levels: two resistances above the pivot and two supports below it. The first pivot break is the directional cue. Later levels serve as objectives and as places to cancel or relocate a trailing stop.

  • A daily pivot is the mean of the prior session high, low, and settlement, and that single value is the input to the four remaining level formulas.
  • The completed grid places two resistance levels above the pivot and two support levels below it.
  • Directional use buys when price first breaks the pivot in an advance and sells when price first breaks the pivot in a decline; later same-session rebreaks are given less weight.
  • After a grid level is broken, its role reverses and the trailing stop is relocated just beyond the broken level.
Entries in this reading3 entries
Current trackPivot point45 readingsTrailing stop87 readingsSupport and resistance170 readings

From one session to a five-level grid

A daily pivot is constructed as the mean of the previous session high, low, and settlement. That single value is an input to the four remaining level formulas.

The completed grid places two resistance levels above the pivot and two support levels below it.

Near levels and the outer grid

First resistance equals twice the pivot minus the prior low. First support equals twice the pivot minus the prior high. Those are the nearer expected reaction zones above and below the daily pivot.

The outer grid is the second resistance and second support pair, derived from the span between the first support and first resistance. Those outer levels are the expected reaction points farther from the center.

Five-level daily pivot grid from a 50-40-48 session

A completed session at high 50, low 40 and settlement 48 averages to a 46 pivot. Resistances sit at 52 and 56; supports sit at 42 and 36. The first pivot break is the directional cue; later rungs are objectives and rails for moving a trailing stop. These five prices are the worked example stated in the article for Figure 1.
A completed session at high 50, low 40 and settlement 48 averages to a 46 pivot. Resistances sit at 52 and 56; supports sit at 42 and 36. The first pivot break is the directional cue; later rungs are objectives and rails for moving a trailing stop. These five prices are the worked example stated in the article for Figure 1.daily

P=(H+L+C)/3, R1=2P−L, S1=2P−H, R2=(P−S1)+R1, S2=P−(R1−S1). Levels are built from one prior session only.

First violation of the pivot

Directional use of the grid is defined as buying when price first breaks the pivot in an advance and selling when price first breaks the pivot in a decline. Later same-session rebreaks of that same level are given less weight.

That earliest same-session break is the first violation.

Objectives, role reversal, and stop relocation

A long started at or just above the pivot treats first resistance as the initial objective. A trailing stop is canceled if that level holds and is moved just above it if the level is broken.

After a grid level is broken, former resistance is treated as later support and former support as later resistance. That level role reversal is paired with trailing stop relocation: the stop is moved just beyond the broken level.

Second resistance and second support are the outer expected reaction points. A break of second resistance is treated as a reason not to remain short, and a break of second support as a reason not to remain long.

Stop distance is set before entry

Stop distance is chosen before entry. Illustrated allowances are six ticks in the S&P 500, three ticks in Treasury bonds, and eight ticks in currencies.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
5 of 38 in the Pivot point track
19961-4 pp.Next on Pivot pointConstructing daily pivot points from session pricesThe next session’s pivot map is built after the regular session ends, from that completed session’s price data.
All readings on this track · 38 readings
  1. 1988Constructing action-reaction lines from two pivots
  2. 1988Constructing intradaily point-and-figure boxes and pivot ladders
  3. 1991Constructing layered support and resistance from swings, pivots, and retracements
  4. 1994Three locks on a day-session order, then a staged exit
  5. 1994Building a five-level daily pivot grid
  6. 1996Constructing daily pivot points from session prices
  7. 1996Higher time frame balance points as a trend and band filter
  8. 1998Cup-with-handle construction rules
  9. 2000Pivot levels as a daily trade hypothesis
  10. 2001Construct a same-session polarity card around the daily pivot
  11. 2001Trading inside the cup-with-handle before the breakout
  12. 2005A lower-low rebound as one entry, abstention, and stop routine
  13. 2006Constructing session pivot maps from the prior high, low, and close
  14. 2006Constructing a pivot grid for stops and buy-stops
  15. 2006Monoparametric automatic trendline construction
  16. 2008Write the exit before the entry
  17. 2010Dynamic-pivot range grids for trend bias
  18. 2010Reverse-entry exits for pairs, pivots and support
  19. 2011Sequencing pairs, futures pivots, and implied volatility
  20. 2013Constructing Camarilla levels from prior range
  21. 2013Camarilla levels as a multi-timeframe map of reversion and breakout
  22. 2013Constructing a camarilla-grid from a completed lookback range
  23. 2013Constructing daily pivot support and resistance rungs
  24. 2014Constructing daily pivot levels from prior-session OHLC
  25. 2014Next-session pivot support and resistance from daily bars
  26. 2014Constructing session pivot rails from the prior-day range
  27. 2014Evaluating moving-average, pivot, and support-resistance filters
  28. 2016Stage a Trailing stop toward a planned target
  29. 2016Smoothed RSI and full-cut pivots for option-income exits
  30. 2017Constructing a weekly seasonality pivot scaffold
  31. 2017Seasonality and pivot points as scenario maps, not forecasts
  32. 2018Wave pivots, strength filters, and option premium
  33. 2018Constructing Fibonacci and daily pivot support maps
  34. 2018Building a daily pivot lattice with Fibonacci rails
  35. 2019Prior-session pivot channels for same-day entries
  36. 2019Constructing intraday pivot channels from prior-session levels
  37. 2020Variable-strength pivot highs as falsifiable entry filters
  38. 2020A high-volume-pivot long after a multi-week decline
By fieldTrend and channels181 readingsBy year199483 readings
All 45 readings tagged Pivot point
Also on Pivot point5 readings
2016Stage a Trailing stop toward a planned target2019Prior-session pivot channels for same-day entries1988Constructing intradaily point-and-figure boxes and pivot ladders1991Constructing layered support and resistance from swings, pivots, and retracements1996Higher time frame balance points as a trend and band filter