Camarilla Pivots – What They Are & How to Trade with Them

Camarilla Pivots – What They Are & How to Trade with Them

What Are Camarilla Pivots?

Camarilla Pivots are an advanced version of standard pivot points, developed by Nick Scott, to provide high-precision support and resistance levels for intraday traders. These levels help determine reversals, breakouts, and potential trading ranges based on previous price action.

The Camarilla Pivot formula calculates eight levels:

• Pivot Point (PP) = (High + Low + Close) / 3
• Resistance Levels:
  • R1 = Close + (High – Low) × 1.0833
  • R2 = Close + (High – Low) × 1.1666
  • R3 = Close + (High – Low) × 1.2500
  • R4 = Close + (High – Low) × 1.5000
• Support Levels:
  • S1 = Close – (High – Low) × 1.0833
  • S2 = Close – (High – Low) × 1.1666
  • S3 = Close – (High – Low) × 1.2500
  • S4 = Close – (High – Low) × 1.5000

Key Features of Camarilla Pivots

• Highly effective for intraday and short-term trading.
• Provides precise support and resistance levels.
• Helps traders identify potential reversal zones.

How to Use Camarilla Pivots in Forex Trading

1. Reversal Trading Strategy

Camarilla Pivots are ideal for mean reversion trading:

• Buy when: Price approaches S3 or S4 and shows signs of reversal.
• Sell when: Price reaches R3 or R4 and starts declining.

2. Breakout Trading Strategy

If price moves beyond the R4 or S4 level, it signals a strong breakout:

• Buy when: Price breaks above R4 with momentum.
• Sell when: Price breaks below S4 with increasing bearish pressure.

3. Range Trading Strategy

When price oscillates between Camarilla levels:

• Buy near: S1 or S2 and target R1 or R2.
• Sell near: R1 or R2 and target S1 or S2.

4. Camarilla Pivots with Moving Averages

Combining Camarilla Pivots with a moving average (e.g., 50 EMA) helps refine signals:

• Buy when: Price is above the 50 EMA and bounces off a Camarilla support level.
• Sell when: Price is below the 50 EMA and rejects a Camarilla resistance level.

Pros and Cons of Using Camarilla Pivots

✅ Pros:

• Provides more accurate intraday support and resistance than standard pivot points.
• Helps traders spot reversals and breakouts quickly.
• Works well in both trending and ranging markets.

❌ Cons:

• Can generate false signals in highly volatile conditions.
• Requires additional confirmation indicators for best results.

Final Thoughts

Camarilla Pivots are powerful trading tools that help traders identify key price levels, confirm trends, and manage risk effectively. When combined with moving averages, RSI, or price action strategies, Camarilla Pivots enhance trade accuracy and decision-making.