Pivot-point reversion

Floor-trader pivot points turn the prior period's high, low, and close into a central pivot and a set of support and resistance levels for the next period. A reversion rule fades a move into support or resistance when price stalls, and uses the pivot as the first target. The levels are arithmetic. They do not know about news.

Not investment advice. Nothing here is a recommendation to buy or sell anything. Backtests and historical studies are not guarantees, and a rule that worked in one sample can fail in the next. Trading can lose money. Links are for education, not endorsements. Do your own research.

Rules

The standard pivot is (high + low + close) / 3 from the prior day. First resistance is twice the pivot minus the low. First support is twice the pivot minus the high. A fade buys a test of first support that closes back above it, with a stop beyond the level, and aims for the pivot. Skip the fade if the day has already accepted beyond the level on strong breadth or if a scheduled release is imminent.

Where AI fits

AI can compute session levels from the exchange calendar, including holidays and half-days, and can refuse fades into a level when the opening drive never traded back. It can log which level, if any, held. Letting it move the pivot formula until the backtest improves is curve fitting.

Markets

Index futures, liquid stocks, and FX during the session the pivot was built from.

Timeframes

Intraday, using the prior day. Weekly pivots are a separate, slower map.

Risks

Trends run through pivot levels. The formulas are common, so the level is not a secret. Different vendors use the cash session or the globex session and get different lines. A fade into a news bar has no stop that will fill at the picture.

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