Camarilla Pivot Points offer guidance for both sideways and trending markets. Trading the Camarilla Pivot Points is done on the basis of open price on the next day (or session). Depending on where price opens, the tool can suggest a trade that could exploit a reversion to the mean or a breakout to new highs or lows.
CENTRAL PIVOT RANGE
Wide CPR >1%= possible ranging day within h3 to l3 Narrow CPR<1%= possible breakout/breakdown day…up to h5 or l5 CPR forming within previous day’s cpr =possible breakout/breakdown day…up to h5 or l5
The Rules Associated with this Indicator are as follows:
Look at the opening price for the stock/ futures / commodities /currency.
------------------------- Case 1 - Open price is between H3 and L3 -------------------------
If CPR width >1% For Long (strong buy signal) Wait for the price to go below L3 and then when it moves back above L3, buy. Stoploss- L4. Target1 - H1 Target2 - H2 Target3 - H3 CPR Test Required? -(NO)
For Short Sell (strong sell signal) Wait for the price to go above H3 and then when the price moves back below H3, sell. Stoploss- H4. Target1 - L1 Target2 - L2 Target3 - L3 CPR Test Required? - (NO)
------------------------- Case 2 - Open price is between H3 and L3 -------------------------
If CPR width >1% nd L3 or H3 are forming within the CPR
For Long (strong buy signal) Wait for the price to go below L3 and then when it moves back above L3, buy. Stoploss- L4 Target1 - H1 Target2 - H2 Target3 - H3 CPR Test Required? - (yes)
For Short Sell (strong sell signal) Wait for the price to go above H3 and then when the price moves back below H3, sell. Stoploss- H4 Target1 - L1 Target2 - L2 Target3 - L3 CPR Test Required? - (yes)
------------------------- Case 3 Open price is between H3 and L3------------------------- Not Considering CPR
For Long Wait for the price to go below L3 and then when it moves back above L3, buy. Stoploss- L4 Target1 - H1 Target2 - H2 Target3 - H3
For Short Sell Wait for the price to go above H3 and then when the price moves back below H3, sell. Stoploss- H4 Target1 - L1 Target2 - L2 Target3 - L3