Central Pivot Range (C.P.R)- Part-2

In first Part of C.P.R. we have learned that what is C.P.R., how it is calculated. Also we have learned to identify trend from C.P.R. movement on chart. So today we are going to learn how to trade using C.P.R.
Let's start with Step to be follow before taking entry.

    1. Step 1 : - Identify Trend (Uptrend, Downtrend, Sideways).
    2. Step 2 : - Decide Entry Level and Stop Loss.
    3. Step 3 :-  Execute trade and Book Profit or Loss.

    Trading Strategy of Upward C.P.R.:-

For Trading Upward C.P.R we have to note C.P.R range for the day and that will be our buying level for the day. If during the day price touch C.P.R range and bounce back towards upside then buy entry can be initiated once price close above intraday high. See below is chart for better understanding.


Above is intraday 15 Minute chart of Nifty -50 where C.P.R is moving higher and higher so that will be our buying zone. From the above chart you can see that on some day price has not even touch the CPR range, so that will be our Stop Loss for the day if we are taking buying entry.

    Trading Strategy of Downtrend C.P.R.:-
For Trading Downward C.P.R we have to note C.P.R range for the day and that will be our Selling level for the day. If during the day price touch C.P.R range and bounce back towards downside then Sell entry can be initiated once price close below intraday low. See below is chart for better understanding.



Above is intraday 15 Minute chart of Nifty -50 where C.P.R is moving lower and lower so that will be our Selling zone. From the above chart you can see that how beautifully price touched CPR and then went down.


    Trading Strategy of Sideways C.P.R.:-
Generally one should avoid trading when direction of price not clear means CPR moving both side. For example today CPR is higher than yesterday but yesterday's CPR is lower than day before yesterday. See below image to understand Sideways CPR price action.


Above is recent days chart of Nifty on 15 Minute time frame. You can see that CPR is not moving in any direction which is know as "Sideways". Difficult to trade on such days because price may move both side in intraday, thereby trader end up trading session with loss or no profit. So prefer to stay away from such days and look for trading opportunity in other stock if any.

I hope you will be now clear with how CPR is helpful in intraday trading and for identification of trend.

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3 comments:

  1. WHAT DOES NARROW AND WIDE RANGE CPR IMPLY?

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    Replies
    1. When gap between average trading price of Buyers and sellers is low then it will form "Narrow Range CPR". And therefore price movement is high once price start moving either up or down to narrow range. Similarly when gap between average trading price of Buyers and Sellers is big then it will create "Wide Range". In such case market movement remain range-bound.

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