Floor pivots are a set of intraday price levels calculated purely from the previous session's high, low, and close, originally developed by traders on physical exchange floors to mark out reference points before the market opened. Because the inputs are just three numbers from the prior session, the resulting levels are objective and can't be manipulated by any single participant.
Pivot point (PP) = (high + low + close) ÷ 3
Resistance 1 (R1) = (2 × PP) − low, Support 1 (S1) = (2 × PP) − high
Resistance 2 (R2) = PP + (high − low), Support 2 (S2) = PP − (high − low)
Using the pivot point as a bias filter
Before taking a trade, comparing the current spot price to the daily pivot point gives a simple directional filter. When price is trading above PP, the bias leans toward buying pullbacks into S1 or a retest of PP itself. When price sits below PP, the bias flips toward looking for short opportunities into R1 or a rejection at PP. This doesn't guarantee a trade will work, but it keeps trades aligned with the day's dominant pressure rather than fighting it.
Mean reversion versus breakout setups
In a ranging session, the pivot levels work well as mean-reversion targets: buying bounces off S1 or S2 with a target back at PP, or selling rejections at R1 or R2 with the same PP target. When the market is trending instead, a clean break through R1 on expanding volume shifts the approach entirely, with R2 becoming the next reasonable objective rather than a level to fade.
Combining pivots with other timeframes
Daily floor pivots work best when checked against market structure on the 4-hour and 1-hour charts rather than traded in isolation. A pivot level that lines up with a 4-hour swing high or low carries more weight than one sitting in the middle of nowhere on the lower timeframe, and that alignment is often what separates a high-confidence setup from a coin-flip entry.