Levels & geometryDeMark Pivot Points · DeMark
A conditional pivot that uses the close-versus-open relationship to project a single support/resistance pair for the next period.
Works in most conditionsEngine-computed on a fixed sample series
What it is
DeMark Pivot Points are a way of guessing, before a new session even begins, roughly where price is likely to trade during it. Where most pivot systems hand you a whole ladder of support and resistance lines, Tom DeMark's method gives you just one resistance level and one support level for the coming period. The clever part is that the calculation is conditional: it looks at whether the previous session closed higher than, lower than, or exactly at its open, and it leans the projection toward the low, the high, or the close accordingly. In plain terms, it answers the question, given how yesterday finished relative to how it started, what is the sensible high-and-low envelope for today? Because it produces a projected range rather than a precise price target, beginners should think of it as a weather forecast for the next bar, not a guarantee. It is popular with traders who find a screen full of pivot lines cluttered and want a single, clean pair to lean on.
How it is calculated
The method starts from the prior period's open, high, low, and close and builds an intermediate value usually written as X. If the close finished below the open, X equals the high plus twice the low plus the close, which pulls the projection down toward the low. If the close finished above the open, X equals twice the high plus the low plus the close, tilting it up. If the close equalled the open, X equals the high plus the low plus twice the close, centring it. The pivot itself is simply X divided by four. From there only two levels are produced: resistance equals X divided by two, minus the low, and support equals X divided by two, minus the high. There is no R2, R3, S2, or S3 — the whole system is deliberately one resistance and one support wrapped around a single pivot.
Reading it, step by step
Read the resistance and support pair as an estimate of the next period's likely high and likely low, not as hard walls. When price spends the session bouncing between the two projected levels, the market is behaving as the prior close-to-open relationship implied, and range tactics apply. A decisive close above the projected resistance says the period is turning out stronger than expected and hints the next bar will trend up; a firm break below projected support says the opposite. The pivot in the middle acts as a rough fair-value line — trading above it leans mildly bullish, below it mildly bearish. Because the levels are conditional on the previous bar's shape, notice that a big directional close will shift the whole envelope meaningfully versus a doji-like close. The single-pair design means you should treat a break as information about momentum, since there is no second level waiting to catch price.
Best timeframes and settings
DeMark pivots have essentially no tunable parameters — the only real choice is which timeframe's open, high, low, and close you feed in. Day traders almost always compute them from the prior daily bar and apply the resulting levels to intraday charts such as the 5-minute or 15-minute. Swing traders can build them from the prior weekly bar to frame the coming week, and position traders from the prior month. The levels are recalculated fresh at the start of each new period and then held fixed, so they act as static reference lines through the session. There is nothing to speed up or slow down; the responsiveness comes entirely from how large or small the previous bar was. Because the formula reacts to the close-versus-open relationship, the tool is at its most useful on instruments that print clean, continuous sessions rather than thin, gappy ones.
When and where to use it
DeMark pivots shine in balanced, range-bound sessions where the projected high and low give you sensible fade points and clear invalidation. They are widely used in liquid futures, index products, and major FX pairs where daily ranges are reasonably stable. In a strong, one-directional trend the tool is less about fading and more about confirmation: price accepting a break of the projected level tells you the trend has legs. Avoid leaning on it in markets that gap heavily overnight, because a large gap detaches today's action from yesterday's open-close logic entirely. It is also a poor fit for very illiquid names, where a single erratic bar produces a distorted projection. Treat it as a framing tool that sets the day's boundaries, then use price action inside those boundaries to make decisions.
Strategies that use it
The first strategy is a range fade: in a session with no strong catalyst, sell rejections at the projected resistance with a stop just above it and a target back toward the pivot or support, and buy the mirror at projected support. The second is a breakout continuation: when price closes firmly beyond the projected resistance on rising volume, enter in the direction of the break, place the stop back inside the level, and trail toward the next round number or prior swing since DeMark gives no second target. The third uses the pivot as a bias filter — only take long setups from other tools while price holds above the DeMark pivot, and only shorts while below it, which keeps you trading with the session's tilt. In every case the tightness of the projected band gives you a clean, pre-defined risk level before the session starts, which is the practical appeal of the method.
Combining it with other indicators
Because DeMark pivots are pure price geometry, they pair naturally with tools that measure participation and momentum. Volume confirmation is the classic partner: a break of the projected resistance backed by a volume surge is far more trustworthy than one on thin tape. A momentum oscillator such as RSI or the stochastic helps you decide whether to fade or follow — an overbought reading at projected resistance strengthens a fade, while a rising oscillator through the level strengthens a breakout read. Some traders overlay standard or Fibonacci pivots to see where the single DeMark pair sits relative to the fuller ladder, using agreement between systems as confluence. VWAP is another useful companion intraday, since price reclaiming both VWAP and the DeMark pivot is a stronger bullish tell than either alone.
Where it fails
The conditional formula is a double-edged sword: because a close just above versus just below the open flips which extreme the calculation leans on, the projected levels can shift character sharply between two otherwise similar sessions. With only one resistance and one support, there is no backup target if price sails through, so late entries on a break have poorly defined exits. Overnight gaps are the classic killer — when today opens far from yesterday's close, the projection built on yesterday's open-close relationship can be irrelevant. Traders also misuse it by treating the single pair as precise lines rather than a fuzzy range estimate, then getting stopped out on normal noise around the level. The fix is to give the levels a small buffer, always demand a close beyond them rather than a wick, and skip the tool entirely on days with major scheduled news that will gap the market.
A worked example
Suppose yesterday's bar opened at 100, made a high of 104, a low of 98, and closed at 99. Because the close of 99 finished below the open of 100, we use the lower-leaning formula: X equals the high plus twice the low plus the close, or 104 plus 196 plus 99, which is 399. The pivot is 399 divided by four, about 99.75. Resistance is X divided by two minus the low: 199.5 minus 98 equals 101.5. Support is X divided by two minus the high: 199.5 minus 104 equals 95.5. So the projection for today is a band running from roughly 95.5 up to 101.5, centred near 99.75. A range trader would look to fade a stall near 101.5 and buy a hold near 95.5, while a breakout trader would wait for a firm close above 101.5 to lean long, knowing the previous session's weak close made that a genuine show of renewed strength.