DeMark Pivot Point Calculator

How to Use the DeMark Pivot Point Calculator

DeMark Pivot Points, developed by Tom DeMark, are a popular technical analysis tool used to predict potential support and resistance levels for the upcoming trading session. Unlike traditional pivot points, DeMark's method places more weight on the relationship between the close and open of the previous period.

1. Enter Previous Session Data: Input the Open, High, Low, and Close prices from the previous trading period (e.g., yesterday's daily candle).
2. Check the Trend: The calculator automatically detects if the previous session was bullish (Close > Open), bearish (Close < Open), or neutral.
3. Review Levels: Get the projected Pivot Point, Resistance 1 (R1), and Support 1 (S1) levels for the current session.

Understanding DeMark Pivot Points

Tom DeMark's system is unique because it calculates a base value "X" depending on how the market closed relative to its open. This conditional calculation accounts for the market's momentum heading into the next session.

The Formulas

The calculation of "X" depends on three conditions:

• If Close < Open (Bearish): X = High + (2 × Low) + Close
• If Close > Open (Bullish): X = (2 × High) + Low + Close
• If Close = Open (Neutral): X = High + Low + (2 × Close)

Once X is calculated, the levels are derived as follows:

• Pivot Point (P) = X / 4
• Resistance 1 (R1) = X / 2 - Low
• Support 1 (S1) = X / 2 - High

DeMark vs. Standard Pivot Points

While standard pivot points use a fixed formula regardless of the trend, DeMark pivots adjust based on market sentiment (bullish or bearish close). This makes them particularly useful for:

• Short-term Trading: Identifying intraday reversal points.
• Breakout Strategies: Determining potential breakout levels above R1 or below S1.
• Trend Confirmation: Validating the strength of the current trend based on where price opens relative to the pivot.

Trading with DeMark Pivots

Traders often use DeMark points in the following ways:

• Support & Resistance: R1 and S1 act as the primary target levels for the day. Prices often oscillate between these points.
• Breakouts: A move above R1 suggests strong bullish momentum, while a break below S1 indicates bearish pressure.
• Opening Strategy: If the market opens above the Pivot Point, the bias is bullish with a target of R1. If it opens below, the bias is bearish with a target of S1.