Few days ago in Unofficed forum, We were discussing about Pivot Points. I was reading about that lately and found something called Woodies’ pivot point.

I landed in the above website with the above calculator.

When I saw half values are missing, I digged below to check the formula -

### Woodie’s Pivot Points
The formula employed in the calculation of Woodie Pivot Points are:
R4 = R3 + range
R3 = H + 2 * (PP – L) (same as: R1 + RANGE)
R2 = PP + range
R1 = (2 * PP) – LOW
PP = (HIGH + LOW + (TODAY’S OPEN * 2)) / 4
S1 = (2 * PP) – HIGH
S2 = PP – range
S3 = L – 2 * (H – PP) (same as: S1 – RANGE)
S4 = S3 – range
Where R1 through R4 are Resistance levels one to four, PP is that the Pivot point, S1 through S4 are support levels one to four, range is that the High minus the Low for the given timeframe (usually daily).

Woodie’s Pivot Points is a popular technical analysis tool used by traders to identify potential support and resistance levels in the market. Woodie’s Pivot Points is a variation of the traditional pivot points formula and was developed by a trader named Tom Woodie. The Woodie’s Pivot Points formula is straightforward to calculate and requires the trader to have access to the high, low, and close prices of the previous trading session. In this article, we will explain how to calculate Woodie’s Pivot Points and its support and resistance levels.

Calculation of Woodie’s Pivot Points

The calculation of Woodie’s Pivot Points is based on the following formula:

Woodie’s Pivot Point (PP) = (High + Low + 2 x Close) / 4

The pivot point is the central point of the calculation, and traders use it to determine the overall trend of the market. Once the pivot point is calculated, traders can determine the support and resistance levels based on the pivot point. The support and resistance levels are calculated using the following formulas:

First Support (S1) = (2 x PP) - High
Second Support (S2) = PP - High + Low
Third Support (S3) = Low - 2 x (High - PP)

First Resistance (R1) = (2 x PP) - Low
Second Resistance (R2) = PP + High - Low
Third Resistance (R3) = High + 2 x (PP - Low)

The first level of support and resistance is calculated using the pivot point, while the second and third levels are calculated using the high, low, and pivot point. The second and third levels of support and resistance are considered to be stronger than the first level.

Woodie’s Pivot Point (PP) = (High + Low + 2 x Close) / 4
or
Woodie’s Pivot Point (PP) = (High + Low + 2 x Open) / 4

Which is correct?

Woodie’s Pivot Point (PP) can be calculated using either the closing price or the opening price, depending on the trader’s preference. So, both formulas are correct:

Woodie’s Pivot Point (PP) = (High + Low + 2 x Close) / 4

or

Woodie’s Pivot Point (PP) = (High + Low + 2 x Open) / 4

In the first formula, the closing price is used to calculate the pivot point, while in the second formula, the opening price is used.

The original pivot point formula, which is still widely used today, is:

Pivot Point (PP) = (High + Low + Close) / 3

Woodie’s pivot point formula is a modified version of the traditional formula. It was developed by trader Tom Wood, also known as “Woodie,” in the early 1990s. The Woodie’s pivot point formula is:

Woodie’s Pivot Point (PP) = (High + Low + 2 x Close) / 4

Woodie’s pivot point formula takes into account the previous day’s price action and gives more weight to the closing price. The formula adjusts the support and resistance levels accordingly. In addition to the pivot point, Woodie’s formula also calculates three levels of support and resistance, known as S1, S2, S3 and R1, R2, R3.

While both the traditional pivot point formula and Woodie’s formula can be used to identify potential support and resistance levels, the Woodie’s formula is considered a more dynamic indicator that reflects recent price action. Traders should use the pivot point formula that best fits their trading strategy and style.

In short now, it is matching with the guy’s calculator. So, I guess he have copied half baked content from one site and half baked code from another site? Lol

Then I browsed more of internet and found most of all used this version only.

Later I found out the entire calculation is bound to be wrong because -

The pivot: (Previous high + previous low + 2 x previous close) / 4

R1: (2 x pivot) – previous low
R2: Pivot + high - low
R3: High + 2 x (Pivot – low)
S1: (2 x pivot) – Previous high
S2: pivot – (high - low)
S3: Low – 2 x (High – pivot)

This is the correct formula. It is using both Previous Low and Low variables. So, Unless you take those inputs, there is no question of posting R3,S3 as it needs previous day’s data. R4,S4 - does not exist

Traders who use Woodie’s formula typically choose which variation to use based on their trading style and preference. Some traders prefer to use the first variation if they are day trading and want to focus only on the current day’s price action and vice versa.