<p>A <strong>Pivot Point</strong> is a technical indicator derived from the previous period’s high, low, and close prices, used to identify potential support and resistance levels for the current trading session.</p>

<h2>How It Works</h2>
<p>The core formula calculates the pivot point (PP) as the average of the prior session’s high (H), low (L), and close (C):</p>
<ul>
<li>PP = (H + L + C) / 3</li>
</ul>
<p>From PP, traders derive additional levels:</p>
<ul>
<li>First resistance (R1) = (2 × PP) – L</li>
<li>First support (S1) = (2 × PP) – H</li>
<li>Second resistance (R2) = PP + (H – L)</li>
<li>Second support (S2) = PP – (H – L)</li>
<li>Third resistance (R3) = H + 2 × (PP – L)</li>
<li>Third support (S3) = L – 2 × (H – PP)</li>
</ul>
<p>These levels are plotted on the chart and act as reference zones where price may pause, reverse, or accelerate. Most trading platforms, including <strong>MetaTrader 5</strong>, provide built‑in pivot‑point calculators that automatically update each session.</p>

<h2>Why It Matters for Traders</h2>
<p>Pivot points offer a simple, objective framework for intraday decision‑making.</p>
<ul>
<li>They highlight areas where buying or selling pressure may converge, helping traders set entry and stop‑loss orders.</li>
<li>Because the levels are based on widely watched historical data, they often attract market attention, increasing the likelihood of price reactions.</li>
<li>Traders combine pivot points with other tools—such as moving averages or candlestick patterns—to filter false signals and improve trade timing.</li>
<li>For brokers like <strong>STB</strong>, offering pivot‑point analysis supports clients who rely on technical strategies across forex, commodities, and indices.</li>
</ul>

<h2>Example</h2>
<p>Assume the previous trading day for EUR/USD recorded:</p>
<ul>
<li>High (H) = 1.2350</li>
<li>Low (L) = 1.2200</li>
<li>Close (C) = 1.2300</li>
</ul>
<p>Calculate the pivot point:</p>
<ul>
<li>PP = (1.2350 + 1.2200 + 1.2300) / 3 = 1.2283</li>
</ul>
<p>Derive the first support and resistance:</p>
<ul>
<li>R1 = (2 × 1.2283) – 1.2200 = 1.2366</li>
<li>S1 = (2 × 1.2283) – 1.2350 = 1.2216</li>
</ul>
<p>Second level:</p>
<ul>
<li>R2 = 1.2283 + (1.2350 – 1.2200) = 1.2433</li>
<li>S2 = 1.2283 – (1.2350 – 1.2200) = 1.2133</li>
</ul>
<p>A trader might watch for a bounce near S1 (1.2216) as a potential long entry, with a stop just below S2 (1.2133) and a target toward R1 (1.2366).</p>

<h2>Key Takeaways</h2>
<ul>
<li>The pivot point is the average of the prior high, low, and close, forming a central reference for the session.</li>
<li>Support and resistance levels derived from the pivot point help identify possible price reaction zones.</li>
<li>Pivot points are widely used on platforms such as MetaTrader 5 and are useful for setting entries, stops, and profit targets.</li>
<li>Combining pivot points with other technical analysis tools increases reliability and reduces false signals.</li>
</ul>