The Camarilla indicator for metatrader 4 helps in calculating the daily pivot point along with support and resistance levels the support and resistance levels provided by this indicator go up to the fifth.
This is accomplished by using the previous day Low, High, Open and Closed and using the data to calculate the ten levels of which five are the low support level and five others are the five resistance levels.
However, the most significant of all these levels are the L3 and L4.
However, the most significant of all these levels are the L3 and L4.
The pivot point are obtained using the Camarilla Equation and hence the Camarilla pivot points. These pivot lines are helpful in performing intra-day trading. Therefore this indicator is best for forex short term traders and scalpers.
Trading using the camarilla indicator.
As a trader you should always look at the L3 and L4 levels since these are the places to enter your orders.so when the market gets to the L3 level you should open a buy order and a sell order when the market price levels hit the H3 level.
You have to wait and confirm before opening any position. The L3 is a resistance level while the H3 is a support level. At the resistance and support levels the market prices are to reverse or at lease bounce back. However sometimes this reversals may be too short lived that it may not lead to any profits. So as a trader you should be advised not to open trades immediately when the prices hits this levels. You should hold your peace till you have truly seen the market has taken on a reversal. This may be indicated by the formation of exhaustion or pin bar candles, exhaustion gaps or break away gaps at these levels.
When trading in the region between the L3, H3 and the breakout levels, once you have opened a trade position then ensure that you target small realistic profits. This can be done by placing take profits at a distance that is not too far from the opened position. The camarilla indicator doesn’t show long term ternds.it only indicates short term trends. Therefore for you to benefit from these you have to be ready to take small profits and get out of the market as soon as possible. Failure to do this you will end making consecutive losses.
However when the breakout level is hit then you can be assured of a true trend in the market prices. The breakout levels are at the L4 and H4.if this levels are hit you can expect the prices to continue in the direction they have chosen. That is to mean if the L4 is passed then there is a downward trend and an uptrend when the H4 is gone past. This means you can buy when prices rise above the H4 and sell when prices fall below the L4 level. Then you can target profits at the L5 and H5 levels respectively.
From the above figure it is not possible to view the L3 and the L4 levels.however if the chart is compressed they can be visible. But if you look at the left side of the chart, the position of all the levels is indicated.
Good luck.
Camarilla-Indicator . rar
Source : forexobroker.com
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