Camarilla Pivot Points are an uncommon variant of pivot points which are based upon Fibonacci levels. They were created by Nick Scott in 1989 who is a successful bond trader. They are a mathematically computed price action analysis tool which generates potential intraday support and resistance levels.
The Camarilla points are an advanced and versatile version of traditional pivot points. Traders can discover the hidden support and resistance levels for the upcoming trading sessions by using the Camarilla pivot points.
Trading Camarilla pivot points helps you to plan your trades ahead of time. They can identify reliable support and resistance levels. They also generate accurate buy and sell signals. They can identify a breakout or breakdown strength of the trend. They reveal the bullish and the bearish price zones.
In Fibonacci pivot points, the main pivot is calculated by adding the maximum (or higher), minimum (or low) and end of the period, and then we divide the result by 3. The range is the difference between the maximum and minimum (high – low), and successive levels are projected by adding a sequence of Fibonacci to the pivot and multiplying the result by the range.
Long Trade Strategy
Short Trade Strategy
Calculation of Camarilla Pivots
Characteristics of Camarilla Pivot Points
The Camarilla pivot points will assist traders in order to filter out the current market condition as they are computed upon volatility of the price.
These pivot points give the trader potential market range for the high and the low within which the market can rise or fall.
The camarilla pivot points are computed for the 8 major levels (4 resistance and 4 support), and each of these levels should be multiplied by a Fibonacci level multiplier. (With additional 2 resistance and 2 support levels)
These pivot points are based on the ideology that the price has a natural tendency to revert back to the statistical mean(average) or to the previous day’s close which is a gap filling phenomenon.
Traders can use the DAILY Time Period in the calculation settings with the 5-minute and 10-minute candlestick charts for intraday trading.
Swing trading can be achieved by using the WEEKLY Time Period in the calculation setting with the Daily candlestick charts.
Traders may initiate a long entry when the price climbs and makes a break over the 3rd resistance level.
Traders can initiate a short entry when the price makes a break below the 3rd support level, this indicates that the trend is strong.
Traders can identify bullish reversals and initiate a long entry when the price touches the S3 support level and placing a stop loss trigger below S4.
Traders can identify bearish reversals and initiate a short entry when the price touches the R3 resistance level and placing a stop loss trigger above R4.
Disclaimer: We do not endorse or encourage you to take trades or investment decisions based upon our posts/research, all of your trading and investment activities are your own and should be taken through consultation with reputed financial advisors. The analysis posted on this website has been created by involving multiple mediums which are present over the Internet.