Camarilla Pivots Indicator for MT4

September 2, 2021

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Introduction to the Camarilla Pivots Indicator

The Camarilla Pivots was first introduced in 1989 by Nick Scott, a successful bond trader. He developed a variation of the Pivot Points which is based on the Fibonacci numbers. This version of the Pivot Points do tend to plot relatively reliable support and resistance levels which traders could use for anticipating potential reversals.

What is the Camarilla Pivots Indicator?

The Camarilla Pivots, also known as the Camarilla Pivot Points Indicator, is a modified version of the classic Pivot Point Indicator. It is basically a Pivot Point Indicator which incorporates the Fibonacci Ratios within its system.

This version of the Camarilla Pivots Indicator plots several dot-dashed lines to indicate the support and resistance levels. It then labels the support levels as L1, L2, L3 and L4, while the resistance levels on the other hand are labeled as H1, H2, H3, and H4.

How the Camarilla Pivots Indicator Works?

As mentioned above, the Camarilla Pivot incorporates the Fibonacci Ratios within its formula. It computes for the various levels using the formulas below.

R4 = (H – L) x 1.1 / 2 + C
R3 = (H – L) x 1.1 / 4 + C
R2 = (H – L) x 1.1 / 6 + C
R1 = (H – L) x 1.1 / 12 + C
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

Where:

C = Previous day’s close
H = Previous day’s high
L = Previous day’s low

How to use the Camarilla Pivots Indicator for MT4

The Camarilla Pivots has just two options within its indicator settings.

The “Camarilla” option allows users to toggle the Camarilla based formula on or off. It uses the Camarilla formula when it is set at “true” and uses a regular Pivot Point formula when it is set at “false”.

Since this indicator is a daily Pivot Point indicator, traders should use the right start of day based on their trading strategy, whether they will use the start of day of a major market or use their local start of day. This indicator allows users to adjust the start of day of the indicator using the “GMT offset” variable.

The Camarilla Pivots Indicator can be used just as a regular Pivot Point Indicator is used. For best results, traders should also consider looking at historical price levels and find confluences between the identified levels and swing point based support and resistances.

Buy Trade Setup

When to Enter?

Open a buy order as price forms a bullish reversal pattern on a support level identified by the Camarilla Pivots. Set the stop loss below the pattern.

When to Exit?

Set the take profit target on a logical resistance level identified by the Camarilla Pivots.

Sell Trade Setup

When to Enter?

Open a sell order as price forms a bearish reversal pattern on a resistance level identified by the Camarilla Pivots. Set the stop loss above the pattern.

When to Exit?

Set the take profit target on a logical support level identified by the Camarilla Pivots.

Conclusion

The Camarilla Pivots is a decent variation of the Pivot Points. It does tend to produce reliable support and resistance levels where price could reverse. Traders should observe and compare between the two variations before deciding which Pivot Point levels they prefer to use.

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