Intraday Trading Using Camarilla (2024)

Camarilla is a trading method used fordoing intraday trading in various markets like Forex, Equities,Futures, Commodities. This suggests that today's intraday support andresistance can be predicted using yesterday's volatility. CamarillaEquation produces 8 levels from yesterday's high, low and close.These levels are split into two groups, numbered 1 to 4. The patternformed by the 8 levels is broadly symmetrical, and the most importantlevels are the 'L3', 'L4' and 'H3', 'H4' levels. While day trading,traders look for the market to reverse if it hits an 'L3' or 'H3'level. They would then open a position AGAINST the trend, using astop loss somewhere before the associated 'L4' or 'H4' level.

Detailed process is explained below.

The another way to day trade with theCamarilla Equation is to regard the 'H4' and 'L4' levels as'breakout' levels - in other words togo WITH the trend if prices push through either the H4 or L4 level.This essentially covers all the bases - Day Trading within the H3 andL3 levels enables youto capture all the wrinkles thatintraday market movement throws up, and the H4 - L4 breakoutplays allow the less experienced traderto capitalise on relatively low risk sharp powerfulmovements.

Intraday Trading Using Camarilla (1)

What is the method to calculate thesimple camarilla levels?

C = Previous Day Close

H = Previous Day High

L = Previous Day Low

H4 = [0.55*(H-L)]+C

H3 = [0.275*(H-L)]+C

H2 = [0.183*(H-L)]+C

H1 = [0.0916*(H-L)]+C

L1 = C-[0.0916*(H-L)]

L2 = C-[0.183*(H-L)]

L3 = C-[0.275*(H-L)]

L4 = C-[0.55*(H-L)]

How to trade based on SimpleCamarilla Levels ?

Once the camarillalevels from L4 – H4 are found, trading is done based on the openprice of thestock orunderlying. Instead of open price, we can also take the WAP (WeightedAverage Price)of the first 5 minof market open.

Now depending onthe open price, we consider below four scenarios:

Scenario 1:Open price is between H3 and L3

- To enter longposition (i.e. To Buy)

o Wait for theprice to go below L3 and then when it moves back above L3,

buy.

o Stoploss shouldbe placed when price moves below (L3+L4)/2.

o Targets :Target1 = H1, Target2 = H2, Target3 = H3

- To enter shortposition (i.e. To Sell)

o Wait for theprice to go above H3 and then when it moves back below H3,sell

or go short.

o Stoploss shouldbe placed when price moves above (H4+H3)/2.

o Targets :Target1 = L1, Target2 = L2, Target3 = L3

Scenario 2:Open price is between H3 and H4

- To enter longposition (i.e. To Buy)

o Wait for theprice to go above H4. As soon as price moves above H4 buy.

o Stoploss shouldbe placed when price moves below (H4+H3)/2.

o Targets :Target1 = 0.5%, Target2 = 1%, Target3 = 1.5%

- To enter shortposition (i.e. To Sell)

o Wait for theprice to go below H3. As soon as the price moves below H3, sell

or go short.

o Stoploss shouldbe placed when price moves above (H4+H3)/2.

o Targets :Target1 = L1, Target2 = L2, Target3 = L3

Scenario 3:Open price is between L3 and L4

- To enter longposition (i.e. To Buy)

o Wait for theprice to go above L3. As soon as price moves above L3 buy.

o Stoploss shouldbe placed when price moves below (L4+L3)/2.

o Targets :Target1 = H1, Target2 = H2, Target3 = H3

- To enter shortposition (i.e. To Sell)

o Wait for theprice to go below L4. As soon as the price moves below L4, sell

or go short.

o Stoploss shouldbe placed when price moves above (L3+L4)/2.

o Targets :Target1 = 0.5%, Target2 = 1%, Target3 = 1.5%

Scenario 4:Open price is above H4

- To enter longposition (i.e. To Buy)

o NA. Buying isnot suggested in such scenarios.

- To enter shortposition (i.e. To Sell)

o Wait for theprice to go below H3. As soon as the price moves below H3, sell

or go short.

o Stoploss shouldbe placed when price moves above (H4+H3)/2.

o Targets :Target1 = L1, Target2 = L2, Target3 = L3

Scenario 5:Open price is below L4

- To enter longposition (i.e. To Buy)

o Wait for theprice to go above L3. As soon as price moves above L3 buy.

o Stoploss shouldbe placed when price moves below (L4+L3)/2.

o Targets :Target1 = H1, Target2 = H2, Target3 = H3.

- To enter shortposition (i.e. To Sell)

o NA. Selling isnot suggested in such case.

A simplificationis to calculate profit targes with ratio stop loss 1: 1

Filter whendistance between L4 - L3 and H3 .H4 is below of 20 pips do not tradeGBP/USD

EUR/USD 16 pips,USD/JPY 20 pips.

Camarilla pivot issuitable for trading with Martingala.

See examples inpictures:

Intraday Trading Using Camarilla (2)



Intraday Trading Using Camarilla (3)

Intraday Trading Using Camarilla (4)

Below the link fordownload Camarilla Pivot indicator Metatrader 4.
https://drive.google.com/file/d/0Bwjv2Pbf48itdHRJNVg3bmZYM00/view?usp=sharing

Intraday Trading Using Camarilla (2024)

FAQs

How accurate are Camarilla pivot points? ›

Camarilla Pivot Points are more accurate than other pivot point systems because they take into account the previous day's price action. This means that they are better at identifying key support and resistance levels, which can help traders make better trading decisions.

Which type of pivot point is best for intraday trading? ›

The data the pivot points give is only applicable to one trading day. This makes them highly specific. Suitable for only short time frames, 1-minute, 2-minute, and 5-minute time frames are the best for pivot point indicators. Pivot point indicators are part of the upper rung of tools when accuracy is concerned.

Which strategy is best for intraday trading? ›

Best Intraday Trading Strategies
  • Momentum Trading Strategy: ...
  • Gap and Go Trading Strategy. ...
  • Bull Flag Trading strategy. ...
  • Pull back trading strategy. ...
  • Breakout Trading Strategy. ...
  • Pivot Point strategy. ...
  • CFD Strategy. ...
  • Scalping Strategy. Scalping is a famous strategy in the Forex market.

Do Camarilla pivots work? ›

The Camarilla pivot can be extremely useful during trending markets, and provide traders with key entry, stop and limit levels. Traders will look to filter entries in the direction of the trend. If the market is trending up, look for buying opportunities at the S3, stop at S4.

Do professional traders use pivot points? ›

Professional traders frequently incorporate pivot points into their trading strategies. They provide crucial reference points for locating probable market support and resistance levels.

Which is the most accurate indicator for intraday? ›

Some best indicators for intraday include relative strength index (RSI), moving averages, stochastic oscillator, Bollinger Bands and volume. Moving averages help traders identify trends and potential reversals, while RSI and stochastic oscillators indicate overbought or oversold conditions.

What is the most accurate pivot indicator? ›

The Fibonacci pivot point is perhaps the most popular among traders. Fibonacci extensions, retracements, and projections are commonly used in forex, but are used with equities as well. The Fibonacci retracement levels are named after a mathematical sequence.

What is the success rate of pivot point trading? ›

I'll review the Pivot Point Supertrend Trading Strategy in this video. This strategy has up to a 90% success rate with an avg. of 80-100% profits weekly.

What is the Camarilla strategy? ›

The heart of the Camarilla Trading Strategy lies in the calculation of pivot points and the subsequent derivation of support and resistance levels. These levels are vital in understanding potential price movements and finding strategic entry and exit points for trades.

How to use camarilla? ›

Camarilla equations are used to calculate intraday support and resistance levels using the previous days volatility spread. Camarilla equations take previous day's high, low and close as input and generates 8 levels of intraday support and resistance based on pivot points.

What is the Camarilla indicator for trading? ›

The Camarilla indicator points are a set of 12 levels that represent support and resistance values for a current trend. There are four levels by default, namely two support and two resistance levels.

Which timeframe is best for intraday trading? ›

Optimal time frames for Intraday trading success

Many experts state that the time frame between 9.30 am and 10.30 am is the best for intraday trading. Trading during these hours is considered beneficial. Intraday traders should avoid trading for the entire day because they might not be able to get sufficient rewards.

How do you maximize profit in intraday trading? ›

How to make money in Intraday Trading?
  1. Let's understand what is Intraday trading with the help of an example:
  2. 1). Select high-volume trade:
  3. 2). Choose the right stocks.
  4. 3). Select a maximum of 2-3 stocks at a time:
  5. 4). Decide a Price.
  6. 5). Monitor your progress:
  7. 6). Select your trades in line with the market trades:
  8. 7).

What is the success rate of pivot points? ›

I'll review the Pivot Point Supertrend Trading Strategy in this video. This strategy has up to a 90% success rate with an avg. of 80-100% profits weekly. I think it's well worth our time to review and potentially implement or even automate going forward.

What is the best indicator to use with pivot points? ›

Pivot Points can also be used together with the Fibonacci tool, candlestick patterns, such as pin bars and Marubozu, as well as indicators such as Oscillators that will provide a confluence of signals for high probability trades.

How accurate is the central pivot range? ›

CPR is usually used in intraday trading and provides the highest accuracy. However, it can also be used to study the daily charts and weekly charts of stock and determine the prevailing stock patterns. The usual practice is to calculate CPR at a higher timeframe than the one used for trading.

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