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# Camarilla Pivot Points

Camarilla Pivot Points is a modified version of the classic Pivot Point. It was introduced in 1989 by Nick Scott, a successful bond trader. The basic idea behind Camarilla Pivot Points is that price has a tendency to revert to its mean until it doesn’t. What makes it different than the classic pivot point formula is the use of Fibonacci numbers in its calculation of pivot levels. Camarilla Pivot Points is a math-based price action analysis tool that generates potential intraday support and resistance levels. Similar to classic pivot points, it uses the previous day’s high price, low price, and closing price.

Camarilla Pivot Points are a set of eight levels that resemble support and resistance values for a current trend. These pivot points work for all traders and help in targeting the right stop loss and profit target orders.

C = Previous day’s close H = Previous day’s high L = Previous day’s low

R4 = (H – L) x 1.1 / 2 + C R3 = (H – L) x 1.1 / 4 + C R2 = (H – L) x 1.1 / 6 + C R1 = (H – L) x 1.1 / 12 + C S1 = C – (H – L) x 1.1 / 12 S2 = C – (H – L) x 1.1 / 6 S3 = C – (H – L) x 1.1 / 4 S4 = C – (H – L) x 1.1 / 2

The most important levels are S3, S4 and R3, R4. R3 and S3 are the levels to go against the trend with a stop loss placed around R4 or S4. While S4 and R4 are considered as breakout levels when these levels are breached its time to trade with the trend.