Scalping with Camarilla pivot

Camarilla pivot points are often used for scalping in a narrow range as in the current conditions of low market volatility. Identification of support and resistance in the range is done with these Camarilla pivot points levels.

In the current low market volatility conditions, trading in the very short term (scalping) based on correction movements is a popular idea and is often done by daily forex traders. Low volatility will tend to form a narrow trading range. Price movements tend to be slow and sometimes 'choppy', but are still in the range. Traders do not have to wait for a price to break a certain level or determine a trend based on Elliot waves and so on, but rather simply determine support and resistance levels as the lower and upper limits of that range. Determination of support and resistance levels is crucial, and in these conditions the most popular is to use Camarilla pivot points. Identification of support and resistance in a range is usually not with Fibonacci retracement, but with the levels of Camarilla pivot points. Camarilla is a variation of conventional pivot points and is considered more accurate especially if prices move within a certain range. The following is the formula for calculating Camarilla pivot points:

Pivot = ( H + L + C ) / 3

S1 = C - (H - L) x 1.1/12

S2 = C - (H - L) x 1.1/6

S3 = C - (H - L) x 1.1/4

S4 = C - (H - L) x 1.1/2

R1 = C + (H - L) x 1.1/12

R2 = C + (H - L) x 1.1/6

R3 = C + (H - L) x 1.1/4

R4 = C + (H - L) x 1.1/2 dimana H: harga tertinggi hari sebelumnya, L: harga terendah hari sebelumnya, C: harga penutupan hari sebelumnya, S: level support, R: level resistance. Berikut contoh penerapannya pada USD/CHF time frame 5 min:

As shown in the picture above, S4 and R4 are extreme levels and can be considered a breakout level. The price moves between S3 and R3, and the trader will wait for an entry opportunity when the price movement reverses after reaching S3 or R3. Trading in a sideways market (ranging) like this is very possible to be done as long as the price has not penetrated its extreme levels, therefore the stop loss and target (take profit) are determined close to extreme levels (S4 and R4). Momentum entry can be confirmed by the oscillator indicator (RSI, stochastic or CCI).

In the example above, the trader sells at the moment the price reverses direction after reaching resistance R3. Camarilla pivot points are often used for scalping in a narrow range and are not suitable for wide ranges or strong trending market conditions

Camarilla pivot is a trading tool present in all professional trading platforms.