Pivot points are price levels calculated from the previous period's high, low, and close to project likely support and resistance for the current session. Day traders use them as ready-made reference levels for entries, stops, and targets. They are most useful as a planning map, not as a guaranteed signal of where price must turn.
If yesterday's XAUUSD pivot sits at 2400 with resistance (R1) at 2415, a trader might watch for sellers near R1 and place a stop just above it.
This definition is for educational purposes only and is not financial advice. Trading involves risk.