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CAMARILLA PIVOT POINTS

Pivot Points are leading indicators calculated based on today's high, low and close price of a stock or index which provides a glimpse of next trading sessions trading range, in other words, support and resistance for traders to take informed trading decisions. There are quite a few Pivot Points Viz., Classic, Camarilla, Fibonacci, Woodie's, DeMark's and even a Central Pivot Range. Here in this blog, I cover about Camarilla Pivot Points.

Camarilla Pivot Points have six support (L1,L2,L3,L4,L5 and L6) and resistance ( H1,H2,H3,H4,H5 and H6) levels. This can be considered as a complete trading system as it not only depicts trading range L3 to H3 but also breakouts above H4 and below L4. Below are the trading strategies associated with Camarilla Pivot Points.

If Open price of a Stock is between L3 and H3 - 
1) If stock price going up, wait till it crosses H4 for long breakout for target of H5 and H6 with stop loss of H3
2) If stock price going up, crosses H3 but reverses below H3, Traders can initiate short position near H3 for a target of L1,L2,L3 and below with a stop loss of H4
3) If stock price going down wait till it crosses L4 for short breakout for target of L5 and L6 with stop loss of L3
4) If stock price going down, crosses L3 but reverses above L3, Traders can initiate long position near L3 for a target of H1,H2,H3 and above with a stop loss of L4.

If Open Price of a Stock is between H3 and H4
1) Traders can initiate long position if stock price crosses above H4 for a target of H5 and H6 with a stop loss of H3. OR 
2) Traders can initiate short positions if stock price crosses below H3 for a target of L1 to L6 with a stop loss of H4.

If Open Price of a Stock is between L3 and L4 
1) Traders can initiate short position if stock price crosses below L4 for a target of L5 and L6 with a stop loss of L3. OR 
2) Traders can initiate long positions if stock price crosses above L3 for a target of H1 to H6 with a stop loss of L4.

If Open Price of a Stock is Above H4 and Below L4 
Do not take long or short positions immediately. Wait till the price moves into the trading range of H3 and L3 and then take long or short positions based on above strategies.

DISCLAIMER- THE ABOVE CONTENT IS GIVEN ONLY FOR THE PURPOSE OF INFORMATION/KNOWLEDGE SHARING BUT NOT FOR ADVISORY. INVESTMENTS IN CAPITAL MARKETS/STOCKS ARE SUBJECT TO PRICE FLUCTUATIONS AND MARKET RISKS. PLEASE CONSULT YOUR INVESTMENT ADVISOR BEFORE TAKING TRADING/ INVESTMENT DECISIONS.
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Location: Bengaluru, Karnataka, India

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