The Central Pivotal Range or CPR Indicator is a recognized indicator used by many traders regularly in trading for Intraday, Swing Trades, and even for long-standing investments in stocks.
Manypeople think that Central Pivot Range is only for intraday trading, but it's not like that. Many traders use Central Pivot Range for both intraday and swing trading. CPR is a very authoritative concept that can be beneficial to traders if they know how to use it correctly. It is one of the most popular and dynamic leading technical indicators available to traders.
The range acts as major support or resistance for every stock and it is so amazing that You can even forecast the trend of any stock, whether it will be bullish or bearish, or sideways.
CentralPivot Range is an average price that is calculated using the last day's trading session and applied to the current trading session. It can be calculated as daily, weekly, or monthly depending on your trading style.
You can use Daily CPR if you are an intraday trader. or if you trade occasionally, you can use Weekly or even Monthly CPR which will give a range in which the market had traded the most in the last day.
This range is where the most of selling and buying took place. It technical indicator used by many days and swing traders. Pivotpoints are powerful and basic indicators in Technical analysis. Similarly, CPR is made up of a pivot linesurrounded by support and resistance levels.
Calculationof CPR
It is made up of three components.
TC= (Pivot – BC) + Pivot
Pivot= (High + Low + Close)/3
BC= (High + Low)/2
you can manually calculate the CPR of any security or stock and other floor and camarilla pivot points. WhenCPR levels are added to a stock's charts, TC is the highest level, the pivot is in the middle,and BC is the lowest, sometimes TC may have a lower value than BC.
It captures all market sentiment and can therefore be used to predict price movements of the next days. CPR levels are calculated using the previous day's close, high, and low prices which remain constant throughout the day.
The Central Pivotal Range or CPR Indicator is a recognized indicator used by many traders regularly in trading forIntraday, Swing Trades, and even for long-standing investments in stocks.
Identify trend of stocks
When CPR levels are added to a stock's charts, TC is the highest level, the pivot is in the middle,and BC is the lowest. Depending on market conditions, TC may sometimes have a lower value than BC.
CPR levels are calculated using the previous day's close, high, and low prices which are constant throughout the day. we should always look for buying opportunities When a stock is in an uptrend.
When the CPR makes lower lows every day, i.e.,one CPR below the other, that means the stock or security is in a down trend. you should always look for shorting opportunities When a stock is in a downtrend.
Importanceof Width in CPR
The width of the Central Pivot Range plays an important role in trading which can help you easily predict the trend of any security or stock. CPR can be divided into three categories-
- Narrow Range CPR : Narrow rage CPR means the stock was within a small range inthe previous day, week, or month, depending on the CPR you are using.
- Medium Range CPR : If the range is neither too narrow nor too wide, we can consider the CPR as a Medium
range CPR. - Wide Range CPR : It means that the stock was within a big range the previous day,
- Virgin CPR : VirginCPR is when all the candles on that trading session have closed either upside
or downside of the CPR, and none of the candles closed at the CPR. It actsas strong support and resistance for the subsequent few trading sessions.
