When trading futures, having a strategy that combines simplicity with effectiveness can be a game-changer. That’s where pivot points come in. Originally developed for floor traders, pivot points remain a staple in technical analysis for modern traders thanks to their ability to highlight potential shifts in price action, market sentiment, price reversals, and breakout opportunities across indices, currencies, and commodities.

Whether you’re looking for quick intraday trades or long-term setups, pivot points are a versatile tool for futures traders.

What Are Pivot Points in Trading?

A pivot point is a technical indicator that uses the prior trading day’s high, low, and close to create reference levels for the next session. Many traders rely on these calculations to identify intraday support and resistance, making them useful for scalping, day trading, and swing trading strategies.

For example, a daily pivot points futures chart provides a visual framework that helps traders quickly spot areas of interest. Some also use Camarilla pivot points as an alternative method, since they generate additional support and resistance levels for tighter trading ranges.

What is the Formula for Pivot Points?

The standard formula for pivot points includes one main pivot level (P) and three levels of support and resistance.

The foundation of using pivot points in trading lies in their calculation. Based on the previous day’s price data (high, low, and close) the standard pivot point formula provides a central pivot point (P), which acts as a primary level of interest for traders. From this central point, additional levels of support (S1, S2, S3) and resistance (R1, R2, R3) are calculated as follows:

• Pivot Point (P) = (High + Low + Close) / 3
• Resistance 1 (R1) = (2 x P) – Low
• Resistance 2 (R2) = P + (High – Low)
• Resistance 3 (R3) = High + 2 x (P – Low)
• Support 1 (S1) = (2 x P) – High
• Support 2 (S2) = P – (High – Low)
• Support 3 (S3) = Low – 2 x (High – P)

These levels give you a roadmap of where the price may reverse, bounce, or break out during the trading day.

Notably, Patrick Wieland, a well-regarded figure in the trading community, utilizes the Standard Pivot Points within Trading View for his analyses. For those following his streams and looking to align with his strategies, setting your pivot points to “Pivot Points Standard” in Trading View will ensure consistency with Wieland’s approach.

Why Pivot Points Matter

Whether you’re trading a single month futures contract or scanning multiple products, pivot points remain one of the most versatile tools for navigating the futures market.

• Access: Easy to apply on nearly any chart, regardless of asset class.
• Technical indicators: Work well alongside moving averages, RSI, and other popular tools.
• Opportunities: Create clear trade setups by marking potential breakout and reversal zones.
• Money management: Help define stop-loss and take-profit levels more effectively.

How to Use Pivot Points in Futures Trading

1. Identify Key Levels

The pivot point acts as the central level for the day and is one of the most popular technical indicators in technical analysis. Prices trading above the pivot point typically indicate bullish sentiment, while prices below suggest bearish momentum.

• Support Levels (S1, S2, S3): Look for potential buying opportunities if the price bounces off these levels.
• Resistance Levels (R1, R2, R3): Consider selling if the price shows signs of rejecting these levels.
• Many traders also incorporate Camarilla pivot points to refine intraday calculations and better define tighter support/resistance zones.

2. Common Trading Strategies with Pivot Points

Pivot Point Breakout

• When to Trade: Enter long when the price breaks above the pivot point or resistance levels in an uptrend. Enter short when the price breaks below the pivot or support levels in a downtrend.
• Stop-Loss Tip: Place your stop-loss just below the breakout level to manage risk.

Pivot Point Bounce

• When to Trade: Enter trades when the price bounces off support or resistance levels.
• Example: If the price pulls back to S1 in an uptrend and holds, consider a long position.

Range-Bound Strategy

• When to Use: In low-volatility markets, trade between the support and resistance levels. Buy near support and sell near resistance.

Intraday Pivot Points

• Best for Day Traders: Use pivot points recalculated from the prior day to identify intraday trading opportunities.

What is the Best Strategy for Pivot Points?

The best pivot point strategy depends on market conditions:

• Trending Market: Pivot point breakouts work best when the market shows strong momentum.
• Sideways Market: A range-bound strategy, buying near support and selling near resistance, is more effective.
• Intraday Volatility: For day traders, using real-time pivot points and combining them with volume indicators can boost accuracy.

What Indicator Works Best with Pivot Points?

Pivot points pair well with other indicators to confirm trade signals:

• Moving Averages: Use them to confirm the overall trend direction.
• RSI (Relative Strength Index): Identify overbought or oversold conditions near pivot levels.
• MACD: Spot momentum shifts that align with pivot point breakouts.

Are Pivot Points Good for Trading?

Yes! Pivot points are highly effective for:

• Identifying potential reversal levels.
• Setting clear entry and exit points.
• Providing predefined levels for stop-loss and take-profit orders.

What is the Success Rate of Pivot Point Trading?

Success depends on market conditions, trader discipline, and risk management:

• Trending Markets: Pivot point breakouts can have a high success rate, especially when combined with volume analysis.
• Range-Bound Markets: Trading between support and resistance levels often yields consistent results.
• Risk Management: Proper stop-loss placement is crucial to maintaining a high win rate.

What is the Most Popular Pivot Point?

The Standard Pivot Point is the most widely used. It’s easy to calculate and provides a reliable framework for support and resistance levels. Many professional traders, including Patrick Wieland, prefer using the Pivot Points Standard setting in platforms like Trading View.

Why Do Pivot Points Have Value in Futures Trading?

Pivot points are particularly useful in futures trading because they:

• Reflect the market’s sentiment using objective price data.
• Work effectively across different contracts, from S&P 500 futures to crude oil and gold.
• Provide clarity in fast-moving markets, helping traders stay focused on key levels.

How to Succeed with Pivot Points

1. Combine with Other Tools

Use pivot points alongside moving averages, MACD, or RSI to confirm your trades.

2. Practice Risk Management

• Always use stop-loss orders to protect your account.
• Avoid over-leveraging, especially in volatile futures contracts.

3. Know Your Market

Different futures contracts respond uniquely to pivot levels. For example:

• S&P 500 Futures: Tend to respect pivot levels due to their high liquidity.
• Crude Oil Futures: May exhibit more volatility around pivot points, requiring wider stop-loss placements.

Final Thoughts

The pivot point trading strategy is a reliable tool for futures traders looking to anticipate price movements and make informed decisions. Whether you’re using it to trade breakouts, bounces, or ranges, pivot points offer clear, actionable levels for entry, exit, and risk management.

By combining pivot points with other indicators and staying disciplined in your approach, you can turn this classic strategy into a cornerstone of your trading routine. Ready to incorporate pivot points into your strategy? Set up your charts, start practicing, and see how these levels can transform your futures trading game.