Camarilla Pivot Points

Camarilla pivot point formula is the refined form of existing classic pivot point formula.
The Camarilla method was developed by Nick Stott who was a very successful bond trader.
What makes it better is the use of Fibonacci numbers in calculation of levels.

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.
There are 4 levels above pivot point and 4 levels below pivot points. The most important levels are L3 L4 and H3 H4. H3 and L3 are the levels to go against the trend with stop loss around H4 or L4 .
While L4 and H4 are considered as breakout levels when these levels are breached its time to trade with the trend.

How to use Camarilla Pivot Points in Trading

Trading is done on the basis of open price on the next day.
Since the market is very volatile in the first 15- 30 minutes of trade and operator action is high, we prefer using weighted average price or the price after 30 minutes as open price.
Depending on the open price there can be different scenarios.

Case 1: Open price is between H3 and L3

Buy when the price move back above L3 after going below L3. Target will be H1, H2, H3 levels. Stop loss can be placed at L4 level
Wait for the price to go above H3 and then when it move back below H3 again sell or go short. Target will be L1,L2 L3 levels and stop loss above H4

Case 2: Open price is between H3 and H4

Buy when the price move back above H3 again after going below H3. Target will be 0.5%, 1% and 1.5% . Stop loss can be placed at H3
Wait for the price to go above L3 and then when it move back below L3 again sell or go short. Target will be L1,L2 L3 levels and stop loss above H4. Target L1, L2 and L3

Case 3: Open price is between L3 and L4

Wait for the price to go above L3 and then when it moves back above L3 again go long. Target will be H1,H2 H3 levels and stop loss below L4.
Wait for the price to go below L4 and then when it moves below L4 go short. stop loss above L3. Target 0.5%, 1% and 1.5%

Case 4: Open price is above H4

Buying can be risky at this level. Wait for the price to go below H3. As soon as the price moves below H3 go short. stop loss above (H4+H3)/2. Target L1 , L2 and L3

Case 5: Open price is below L4

Selling could be risky at this level as price has opened with big gap down. Wait for the price to go above L3. When the price moves above L3 buy with stop loss of (L4+L3)/2. Target H1, H2 and H3

These are the five cases based on open price on which you have to take trading decision.
It gives good results by combining camarilla with other technical indicators like RSI and MACD you can further improve the accuracy.