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Camarilla
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What are Camarilla Pivot Points?

  • Camarilla Pivot Points are a modified version of the classic Pivot Point.
  • They were launched in 1989 by Nick Scott, a successful bond trader.
  • The basic idea behind Camarilla Pivot Points is that price tends to revert to its mean until it doesn't.
  • They are a mathematical price action analysis tool that creates possible intraday support and resistance levels.
  • Camarilla Pivot Points consist of eleven levels that resemble support and resistance values for a current trend.

Calculation of Camarilla Pivot Points

  • R4 = ((High - Low) * 1.1) / 2 + Close
  • R3 = ((High - Low) * 1.1) / 4 + Close
  • R2 = ((High - Low) * 1.1) / 6 + Close
  • R1 = ((High - Low) * 1.1) / 12 + Close
  • S1 = Close - ((High - Low) * 1.1) / 12
  • S2 = Close - ((High - Low) * 1.1) / 6
  • S3 = Close - ((High - Low) * 1.1) / 4
  • S4 = Close - ((High - Low) * 1.1) / 2

Camarilla Swing Trade Strategy

Buy Entry

  • The opening price of the Week candlestick is greater than CPP (Camarilla Pivot Point).
  • Identify the buying advantage when CPP is less than Support Line 2.
  • When the price breaks the support line between the 2nd and 4th support lines, then the price reverses and rises above the said support line.
  • Set Stop Loss (SL) at points S5 and Take Profit (TP) equal to the distance between the entry point and the SL point.

Sell Entry

  • The opening price of the Week candlestick is less than CPP.
  • Identify the advantage in purchasing when CPP is greater than Resistance line 2.
  • When the price breaks the resistance line between the 2nd and 4th resistance lines, then the price has reversed down to stand below the said resistance line.
  • Set SL at points R5 and TP equal to the distance between the entry point and the SL point.

Key Features of Camarilla Pivot Points

  • They help to target accurate stop loss and target profit orders.
  • The most important levels are S3, S4 and R3, R4.
  • They are ideal for intraday trading due to their sensitivity to price movements.
  • They provide a clear framework for traders to understand potential market reversals and continuations.

Benefits of Using Camarilla Pivot Points

  • They offer a structured approach to identifying key support and resistance levels.
  • They can be used across various timeframes, making them versatile for different trading strategies.
  • They help traders make informed decisions by providing a mathematical basis for price action analysis.
  • They are particularly useful in volatile markets where price reversion to the mean is common.

Conclusion

  • Camarilla Pivot Points are a powerful tool for traders looking to identify key levels in the market.
  • They provide a structured approach to trading, helping traders make informed decisions based on mathematical analysis.
  • Whether you are a novice or an experienced trader, incorporating Camarilla Pivot Points into your strategy can enhance your trading performance.