Pivot Points Explained: Classic, Fibonacci and Camarilla Formulas and Uses

A pivot point is a price level calculated from the high, low and close of the previous period, usually yesterday, and used as a reference for today. The middle line is P. Above it sit R1, R2 and R3 (resistance), below it S1, S2 and S3 (support). The appeal is that everyone using the same data gets exactly the same lines, with nothing drawn by hand. One thing to know up front: these lines are just arithmetic on past prices. There is no evidence that price is pulled towards them or made to stop there.

The Classic (floor pivot) formula

The formula comes from exchange floor traders who wanted daily reference levels they could work out quickly by hand. Most platforms use it as the default.

Level	Formula
P	(H + L + C) ÷ 3
R1	2 × P − L
S1	2 × P − H
R2	P + (H − L)
S2	P − (H − L)
R3	H + 2 × (P − L)
S3	L − 2 × (H − P)

H, L and C are the previous period’s high, low and close. Notice that R1 sits as far above P as P sits above yesterday’s low, and S1 sits as far below P as P sits below yesterday’s high. The levels simply mirror the shape of the previous day. Nothing else goes into them.

Some platforms use a different R3 and S3: P ± 2 × (H − L), which puts them further out than in this table. If your outer levels don’t match someone else’s, check this first.

Worked example, step by step

Say a currency pair made a high of 1.08370 yesterday, a low of 1.07714, and closed at 1.08208 (a 65.6-pip range).

1. P = (1.08370 + 1.07714 + 1.08208) ÷ 3 = 3.24292 ÷ 3 = 1.08097
2. R1 = 2 × 1.0809733 − 1.07714 = 1.08481
3. S1 = 2 × 1.0809733 − 1.08370 = 1.07825
4. R2 = 1.0809733 + 0.00656 = 1.08753
5. S2 = 1.0809733 − 0.00656 = 1.07441
6. R3 = 1.08370 + 2 × (1.0809733 − 1.07714) = 1.09137
7. S3 = 1.07714 − 2 × (1.08370 − 1.0809733) = 1.07169

Check: R1 − P should equal P − L, about 38.3 pips, and P − S1 should equal H − P, about 27.3 pips. They do. Keep full decimals while you calculate and round only at the end, or a level can end up a point off.

Yesterday’s close is about 11 pips above P, because the day closed near its high.

How Fibonacci and Camarilla differ

Both use the same H, L and C. They differ in how they spread the levels out.

Fibonacci pivots use the same P as Classic, then add and subtract fractions of the day’s range (H − L).

• R1, S1 = P ± 0.382 × (H − L)
• R2, S2 = P ± 0.618 × (H − L)
• R3, S3 = P ± 1.000 × (H − L)

Camarilla doesn’t use P. It starts from yesterday’s close (C) and adds and subtracts the range times 1.1.

• R1, S1 = C ± (H − L) × 1.1 ÷ 12
• R2, S2 = C ± (H − L) × 1.1 ÷ 6
• R3, S3 = C ± (H − L) × 1.1 ÷ 4
• R4, S4 = C ± (H − L) × 1.1 ÷ 2

In the same example, Camarilla R3 = 1.08208 + 0.00656 × 1.1 ÷ 4 = 1.08388, only 18 pips from the close, while Classic R3 is almost 93 pips away. Same inputs, very different picture. People who teach Camarilla usually watch R3 and S3 for reversals and R4 and S4 for breakouts. That is a convention passed down, not a proven result.

Which bar is “yesterday”?

This is where people slip up most often. Pivots come from the daily bar, and the daily bar is cut at the broker’s server time, not at midnight Thai time.

• Many brokers change day at 17:00 New York time, around 04:00 to 05:00 Thai time (UTC+7). See Forex market hours in Thai time
• If a server cuts the day earlier or later, the high, low and close change, and the whole set of levels changes with them
• Some server setups produce a short Sunday bar of just a few hours. Monday’s pivots calculated from that bar come out unusually narrow
• Crypto trades every day, and most charts cut the day at 00:00 UTC, which is 07:00 Thai time. Check your platform

If MT5 and another charting site show different lines, the formula is usually fine. They are using different daily bars. Go by the chart you trade on.

There is no single set of pivots that “the whole market” watches. Each trader sees levels based on their own day cut-off.

Weekly and monthly pivots

The formulas are identical. Only the period changes.

• Weekly uses last week’s high, low and close, giving one set of levels for the whole week
• Monthly uses last month’s, for the whole month

Because weekly and monthly ranges are much wider than a daily range, the levels sit far apart, and on many days price doesn’t come near them. Day traders tend to use daily pivots first and glance at weekly ones to see where price sits in the bigger picture, much like multi-timeframe analysis.

How traders use pivots

1. Which side of P is price on?

If price trades above P all day, today is trading above yesterday’s midpoint. Many traders use that as the day’s lean: above P they look mainly for buys, below P mainly for sells. This only describes where price is. It doesn’t say price will keep going.

2. Targets and distance checks

R1 and S1 are often used as first targets, or as a way to see how far the day has already travelled. A day that reaches R2 or S2 is a day with a wider range than yesterday. Classic R3 and S3 are far away and many days never touch them.

3. Look for confluence

A pivot that happens to line up with an old high or low, a round number or a weekly pivot is a place several groups of traders are watching at once. Traders usually give it more weight than a line on its own. For finding levels from price structure, see support and resistance, supply and demand zones.

4. Two opposite approaches

Some traders wait for price to bounce off a line, others wait for it to break through and follow. Same line, opposite thinking, and neither is always right. What separates them is the rules set in advance, not the line itself.

The lines are not magnets

In the first figure, today’s price dips below P for a while, then climbs about 18 pips past R1 before falling back to close under it. It never reaches R2 or S1. The lines don’t hold price anywhere in particular, and that’s normal. With many lines and price moving every day, some line will always sit near a turning point. If you only remember the days price bounced right off a level, the lines will seem more accurate than they are (more in hindsight bias on charts).

Don’t confuse this with the other meaning of pivot: a swing pivot, the turning point that ZigZag or fractals mark. That is an actual top or bottom in price, and you only know it after the fact. The pivot points in this article are calculated in advance from a formula. Different things.

Still, a lesson from measuring swing pivots applies to both. In our backtests on gold M1 from 2022 to 2026 (the last year partial), we tried a rule that trades against the move once ZigZag confirms a turning point. In 2022, counted from an event table, the rule won 53.67% of 177 trades. Written as a system and tested in MT5 in Every tick mode, the same year took 224 trades and won only 48.21%. Run over every test year (2022 to August 2026), the system lost 11,647 dollars in total on a 100,000-dollar test account at fixed lot size.

The 47-trade difference was the trades the table had dropped because they hadn’t reached Take profit or Stop loss within the time window, and those trades won only 27.7%. Counting only events that “finished cleanly” made the numbers look better than reality. If you count how often price bounces at a pivot, also count the times it sliced straight through and the times it just sat there. This is a backtest on one market, and past results do not predict future results (why backtest and live results differ).

A pivot tells you where price is compared with yesterday. It doesn’t tell you where price will stop.

Using pivots with risk management

Pivots help you plan distances, but risk always has to be worked out in numbers.

As an example of the thinking, using the levels above: say the plan is to enter at 1.08150, above P, with a Stop loss at 1.08040, a little below P, and a target at R1, 1.08481.

• Risk = 1.08150 − 1.08040 = 11.0 pips
• Target = 1.08481 − 1.08150 = 33.1 pips
• RR = 33.1 ÷ 11.0 = 3.01

This ignores spread, and it doesn’t mean price will reach the target. Next, size the position from the 11.0-pip distance, as in position size from Stop loss distance.

Two things to watch:

• Don’t put your Stop loss exactly on a line. Lots of people see the same line, and a quick touch and reversal can take you out. Leave a buffer, for example based on ATR
• Unusually narrow or wide days. After a holiday or a big news day the whole set of levels shrinks or stretches. If the distance to your Stop loss is only a few times the spread, costs will eat heavily into results

Common mistakes

• Using the wrong daily bars. Not knowing when your server changes day, or reading levels from a site that cuts the day differently from the chart you trade
• Switching on every formula at once. Classic, Fibonacci, Camarilla, daily and weekly add up to dozens of lines. Wherever price goes there is a line waiting, so the lines look accurate every time
• Treating lines as magnets and fading a strong trend every time it touches R or S
• Rounding mid-calculation, which shifts the levels. Keep full precision until the last step
• Not updating at the new day. Yesterday’s levels don’t apply today. Recalculate for each period
• Placing the Stop loss right on a line instead of working it out from volatility and the position size you can afford