Description:
Camarilla pivot points are support and resistance levels used in technical analysis. Calculated based on the previous day's high, low, and close prices, they include levels like R3 (midpoint), R2, and R1 for potential resistance and corresponding S3, S2, and S1 for support. Traders use these points to identify entry/exit levels and set stop-loss/take-profit orders, aiding in decision-making.
Input Parameters:
- Price Source: The specific data points (such as open, high, low, or close) from each candle in a financial chart that an indicator uses for mathematical computations, enabling the calculation of metrics like the average over a specified period.
- Offset: The offset value is used to access the data of any candle or indicator concerning the current candle. For example, to access the current candle data it will use the offset value of "0", to access previous candle data "-1" offset value will be used, and access data of previous to previous "-2" will be used.
- S4: This is calculated by taking half the distance between yesterday's high and low and subtracting it from the low.
- S3: This is a quarter of the distance between yesterday's high and low subtracted from the low.
- S2: This represents a sixth of the distance between yesterday's high and low subtracted from the low.
- S1: This is calculated by dividing the distance between yesterday's high and low by 12 and subtracting it from the low.
- R4: This level is calculated by taking half the distance between yesterday's high and low and adding it to the high.
- R3: This is a quarter of the distance between yesterday's high and low added to the high.
- R2: This represents a sixth of the distance between yesterday's high and low added to the high.
- R1: This is calculated by dividing the distance between yesterday's high and low by 12 and adding it to the high.
Use Cases:
- Identifying Entry and Exit Points: Pivot points can help traders determine optimal entry and exit points for trades. For example, a trader might go long when the price bounces off a support level or go short when it reverses from a resistance level.
- Stop Loss Orders: Pivot points can be used to set appropriate stop-loss orders. Traders can place stop-loss orders below support levels for long positions or above resistance levels for short positions.
- Profit Targets: Traders can use pivot points to set profit targets by anticipating the next level of support or resistance as the price moves in their favor.
This feature can be used in:
- Market Scanner
- Strategy Tester
- Dynamic Alerts
- Multi-Factor Alerts
- Smart Checklist
Do you want to learn more? Check out our Learning Center Article.