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Price structure
Are pivot points a forecast, or a map of the prior day?
Pivot points · Floor pivot points
What it bets
The prior session's high, low, and close give today a set of reference prices that get tested again and again.
How the rule is written
The classic floor pivot equals the arithmetic average of the prior day's high, low, and close. The first resistance is twice the pivot minus the prior day's low. The first support is twice the pivot minus the prior day's high. The trading rule still has to be written separately, for example buying a pullback to the pivot, or following a break of the first resistance. The pivot itself is not a direction. In crypto, the hours of the prior trading day have to be defined first.
When it fails
Treating support and resistance as targets that price must reach. Price can go a whole day without touching these levels, or touch once and leave.
Do not confuse it with
Prior highs and lows come from swing structure. A formula does not place them each day. Pivot points are computed every day from the prior day's three prices, and they do not have to land on a swing point.