Central Pivot Range (C.P.R)- Part-1

        The New traders who enters in the market with mindset of big profit within short period of time they always prefers to go with Technical Indicator that provides "Buy" & "Sell" signal. After applying one indicator they fail & then another indicator and again fail and so on. Right or not??. Hahahaha. 

        Why this happens ?? Because all we want profit, so what should we do?? We should understand price action of any security/stock/index. That is the first key to open the door of profitable trading.

        C.P.R. (Central Pivot Range) is one of the indicator that helps you to open that door. I will explain concept and use of C.P.R. in parts today First Part i am sharing. C.P.R. is nothing but average price calculated based on yesterday trading session thereby applying to current trading session for trading. C.P.R. can be calculated for Daily, Weekly, Monthly as per your trading style. If you are intraday trader then Daily C.P.R is most important and if you are positional trader then you can use Weekly or Monthly C.P.R. 

        Below is how C.P.R. Looks on chart. It has 3 Lines. The middle line is "Pivot Point" & line above the Pivot Point is called "Top C.P.R (TC)" and line below Pivot Point is called as "Bottom C.P.R (BC)". Calculation is also given below the image.
Calculation of CPR:-

TC = (Pivot – BC) + Pivot
Pivot = (High + Low + Close)/3
BC = (High + Low)/2
            Hence, C.P.R is giving us the range within which market traded most of the time yesterday. Means majority of buying and selling happens in this range. So one has to consider C.P.R range as yesterdays average price.

            Once you plot C.P.R (It is Automatically Available in Brokers Charting Software) on chart you have to check current trend.  How to check trend ?? Go to below image.

         15 Minute Bank Nifty (Uptrend)

                From the above chart we can see that everyday C.P.R is moving higher high that means current trend is bullish. In such trend you have to look for buying opportunity near C.P.R. 

15 Minute Bank Nifty (Downtrend)

      From the above chart we can see that everyday C.P.R is moving Lower Low it means current trend is bearish. In such trend you have to look for shorting opportunity near C.P.R. 

                                                   15 Minute Nifty (Sideways)

            From the above chart we can see that C.P.R is moving up and down.It means current trend is Sideways. In such trend you have to wait for breakout in either side.

            After confirmation of current trend that you can decide looking chart you have to decide entry level. Now, how to decide that ??? That i will share tomorrow enough for the day.

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