Camarilla Pivot Levels for Reversal and Breakout Trading

Summary

The document explains Camarilla levels derived from the previous period’s high, low, and close. The range is scaled by fixed coefficients to produce four levels above and four below the close, intended as intraday resistance and support. It presents the inner third levels as places to consider trades against the prevailing move, with the outer fourth levels serving as invalidation areas; a move beyond the outer levels is described as a breakout setup in the direction of the move.

The accompanying backtest script selects configurable upper and lower thresholds, assigns a long bias when price is above one threshold and a short bias when below the other, and carries the prior position while price remains between them. An optional reverse setting flips the signals, and bar colors display the resulting state. The document gives no performance statistics or market-specific validation. Its input resolution and threshold mapping should be checked carefully: the script’s labels and selected level calculations do not straightforwardly match the stated support and resistance terminology, which can affect interpretation.

Key ideas

• Camarilla levels use the prior period’s high-low range and close to define four levels on each side.
• The text describes third-level touches as potential countertrend setups and fourth-level breaks as trend-following breakouts.
• The script maintains a directional state based on configurable price thresholds and can optionally reverse that state.
• The document supplies no evidence of profitability, and its level labels should be reconciled with the calculations before use.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.