Central pivot range(CPR), this is tool used in techenical analysis for identify the potential support and resistance levels. CPR is good tool for Intraday and short term traders, such as day traders. CPR is made from previous day’s data. You can find it in the Indicator section or you can calculate it.
Formula Calculating the Pivot Levels: Here’s how can you calculate CPR for next day.
> Central Pivot Line(CPR) = (High of the previous day + Low of the previous day + Close of the previous day) / 3
> Lower Boundary (LB) = (High + Low) / 2
> Upper Boundary (UB) = (Central Pivot Line – Lower boundary) + Central Pivot Line
> R1 = (2 × Pivot) – Low
> R2 = Pivot + (High – Low)
> R3 = R1 + (High – Low)
> S1 = (2 × Pivot) – High
> S2 = Pivot – (High – Low)
> S3 = S1 – (High – Low)
How CPR s Useful in Trading:
- Intraday Trading: CPR is specially use for Intraday trading. With the help of CPR traders can make quick decisions for Entry and exit to their positions.
- Range Bound Market: In a range bound market, where prices are moving within a range, CPR can help traders to identify potential reversal points and profit taking levels.
- Trend Confirmation: If market opens above the CPR level it means market may bullish and market is below the CPR than market may downtrend.
- Stop Placement: Traders use CPR levels as reference points for placing stop loss and take profit orders. This can help to manage risk and protect trading capital.
- Combining with other indicators: You can use CPR in combination with others other technical indicators, like moving averages, RSI, and stochastic oscillators.
- Day Trading Strategies: Day traders often integrate CPR into their trading strategies, including breakout strategies and range trading strategies.
Central Pivot Range(CPR) is valuable tools for traders. I use that too for my Intraday trading. i think every traders should practice using CPR in a demo or paper trading to become familiar with CPR before using it with real money.
Thanks