The only 'CPR' video you will ever need | CPR & Pivot Points | CPR Strategy | CPR Indicator | Pivots

Summary

In this comprehensive video on trading, Fortune Talks delves into the intricacies of the CPR (Central Pivot Range) indicator and floor pivots, transforming how traders approach the market. Focusing on vital aspects such as the calculation, advantages, and practical strategies for using CPR, the video aims to provide traders with a competitive edge. It covers the historical significance of floor pivots, the power of CPR in forecasting market moves, and two essential CPR strategies. With insights from influential books, the video stresses on CPR's role in enhancing trading strategies for both intraday and swing traders.

Highlights

• CPR indicator revolutionizes trading with precise market insights 🔍.
• Learn the history and significance of floor pivots from trading legends 📚.
• Unlock advanced trading strategies using CPR and floor pivots 🗝️.
• Grasp the psychology behind trader reactions to pivot levels 🤔.
• Discover strategies for different market conditions, including trending and breakout days 🌟.

Key Takeaways

• CPR indicator is a game changer for traders seeking a competitive edge 🎯.
• Understanding pivot ranges can transform market predictions and strategies 🔮.
• CPR and floor pivot points are essential for identifying market trends and potential breakouts 🚀.
• Key strategies involve recognizing narrow CPRs and pivot relationships for effective trading 📊.
• Pivot points serve as support and resistance levels, crucial for trend analysis and trade decisions 🔍.

Overview

Fortune Talks presents a deep dive into the CPR and floor pivot indicators, explaining their significance in modern trading. The video embarks on a journey through the history of pivots, emphasizing their timeless relevance and accuracy due to trader psychology.

As the video progresses, viewers are guided through intricate details of calculating CPR and understanding its components. The ability to forecast market conditions using CPR, especially in predicting trending or sideways days, highlights its value in a trader’s toolkit.

Practical strategies using CPR are elaborated, such as identifying narrow pivot ranges and exploiting pivot relationships. The insights offer traders a robust framework to navigate volatile markets and optimize their trading strategies.

Chapters

• 00:00 - 00:30: Welcome and Overview This chapter introduces the CPR (Central Pivot Range) indicator, a revolutionary tool in trading that can significantly alter one's approach to reading charts and trading. It sets the stage for a detailed discussion on CPR and floor pivots with a focus on how CPR can give traders an edge over others. The chapter aims to enhance the viewer's understanding and application of these trading tools.
• 00:30 - 01:00: Video Duration and Subscription Request This chapter discusses the importance of watching the video until the end and encourages viewers to subscribe and enable notifications to stay updated on future content. It also suggests sharing the video with friends and fellow traders. The chapter will cover the basics of the CPR indicator, its calculations, and the significance of these calculations for traders.
• 01:00 - 01:30: Topics Covered in the Video The chapter focuses on various aspects of CPR (Central Pivot Range) in financial markets. It begins with an overview of CPR, discussing its introduction and background. The video then covers the advantages of using CPR, followed by its various applications. Additionally, the significance of the CPR indicator is highlighted. The chapter also addresses some disadvantages associated with CPR. Following this, it outlines general criteria for using floor pivots, which are related to CPR. Finally, the chapter concludes with two specific CPR strategies that viewers can apply in the market.
• 01:30 - 02:30: History of CPR and Floor Pivots The chapter discusses the historical significance of floor pivots, which have been used by traders for a long time to understand market movements. Larry Williams, a renowned stock and commodity trader, played a key role in bringing this method back into the spotlight by featuring it in his 1979 book "How I Made 1 Million Dollars Last Year Trading Commodities." The book elaborates on the formula used to calculate the pivot price.
• 02:30 - 05:00: Floor Pivots: Importance and Calculation The chapter discusses the concept of 'floor pivots,' also known simply as pivots or pivot points. These are used in trading to predict the potential high and low price range for the next day. The name 'floor pivots' is derived from their popularity among traders on the exchange floors. Floor pivots help traders identify the potential support and resistance levels for a trading day.
• 05:00 - 06:00: Trader Psychology and Market Consistency The chapter 'Trader Psychology and Market Consistency' delves into the historical context where traders worked without modern technology like sophisticated computers and software on exchange floors. It distinguishes floor pivots as a unique type of pivot point, emphasizing their strength in offering price-based support and resistance levels. These are calculated using prior periods' high, low, and close prices. Floor pivots provide a powerful framework for understanding and anticipating market movements, visually mapping market trends and shifts.
• 06:00 - 07:00: Standard Floor Pivots This chapter delves into the concept of floor pivots and their significance in market behavior, especially during uncertain times. It suggests that a deep understanding of pivots reveals the parallel nature between these pivots and price behavior. The chapter argues for the accuracy of these pivots by explaining that market participants are aware of and actively watch these levels, making them significant points for trading decisions.
• 07:00 - 09:30: Formula and Importance of High, Low, and Close The chapter discusses the persistent influence of trader psychology and human nature on market dynamics, which have remained unchanged for centuries. Key emotional drivers such as fear, greed, hope, and uncertainty are highlighted as reasons why traders consistently respond to critical chart levels. The text emphasizes the enduring relevance and effectiveness of pivots in trading due to these unchanging psychological factors.
• 09:30 - 11:00: Enhancing Standard Floor Pivots for Modern Volatility In this chapter, the focus is on enhancing standard floor pivots to adapt to modern market volatility. It draws insights from Franklin Ochova's book, 'Secrets of a Pivot Boss', highlighting the continued importance and potential confusion caused by floor pivots despite their long-standing presence in markets. The author encourages a reading of Ochova's work for further valuable insights applicable across diverse market participants.
• 11:00 - 13:00: Introduction to Central Pivot Range (CPR) The chapter provides an introduction to the Central Pivot Range (CPR) and discusses the existence of various formulas in the market. It highlights that although several variations exist, one formula is widely accepted as the standard. This formula requires inputting the high, low, and close from a previous day, week, or month, based on the time frame chosen for analysis. It then automatically calculates the central pivot, along with three resistance levels (R1 to R3) and three support levels.
• 13:00 - 15:00: Formula and Components of CPR The chapter discusses the formula and components of CPR (Central Pivot Range) used in trading. It highlights the use of seven pivot levels plotted on charts for trading activities. The high, low, and close prices are emphasized as critical components because they represent the most significant values for any given period, reflecting bullish and bearish market expectations.
• 15:00 - 16:30: Advantages of CPR The chapter titled 'Advantages of CPR' discusses the significant role of price references in market analysis, particularly focusing on how the closing price provides insight into market behavior. It explains the concept of a pivot, calculated as an average of three significant prices from a prior trading period or day, which serves as a central reference point. The chapter highlights that understanding these pivots and their calculations is essential for analyzing market movements, suggesting that floor pivots, derived from the central pivot, offer substantial analytical advantages.
• 16:30 - 18:00: Applications of CPR in Various Time Frames The chapter discusses the application of CPR indicators in various time frames, emphasizing the need for modifications in the face of modern market volatility.
• 18:00 - 19:00: Leading Indicators vs. Lagging Indicators The chapter "Leading Indicators vs. Lagging Indicators" discusses the concept of adding multiple levels of support and resistance in market analysis to account for current market movements. The addition of a fourth and even a fifth level of support and resistance is introduced to help provide more accurate targets during volatile market days, especially when the market surpasses the third layer of pivot levels. The discussion also refers to the concept of pivot range from Mark Fisher's book, indicating a deeper dive into technical analysis for market predictions.
• 19:00 - 25:00: Forecasting with Pivot Width Analysis The chapter titled 'Forecasting with Pivot Width Analysis' discusses the concept of expanded floor pivots and the central pivot range (CPR) as a powerful indicator in trading. It explains the use of top and bottom pivots in relation to a central pivot to set up rates, particularly beneficial for intraday traders. The CPR consists of three levels and is used to identify key price levels.
• 25:00 - 28:00: Narrow Pivot Range: A Sign of Breakouts This chapter explains the concept of a 'Narrow Pivot Range' in trading and how it can signal potential breakouts. The pivot range consists of three main components: the central pivot, the bottom central pivot, and the top central pivot. These levels are calculated based on the previous day's high, low, and close prices. The central pivot is the average of these three prices, the bottom central pivot is the average of the high and low, and the top central pivot is a combination of the pivot and the difference between the pivot and the bottom central pivot. Understanding this range helps traders anticipate price movements and potential breakouts.
• 28:00 - 41:00: Understanding Pivot Range Relationships The chapter titled 'Understanding Pivot Range Relationships' begins by emphasizing the core nature of the formulas involved in calculating the Central Pivot Range (CPR). It highlights that these formulas mainly rely on simple averages and manipulations thereof. The fundamental takeaway is the association of averages with underlying market trends, which is a common principle in technical indicators. Specifically, the CPR indicator aids traders in identifying crucial price points and understanding the trends around these price levels. The chapter sets the stage to delve deeper into what makes the CPR indicator particularly unique and valuable for traders.
• 41:00 - 48:00: Using CPR to Identify Market Trends This chapter discusses the use of Central Pivot Range (CPR) for identifying market trends. It highlights CPR as a critical component of the floor pivots indicator, its ability to act as support or resistance, and its predictive power in forecasting trending or sideways market behaviors.
• 48:00 - 54:00: CPR's Magnetic Effect on Price and Gap Trading This chapter explores the impact of CPR (Central Pivot Range) on price movement and its implications for gap trading. It highlights how CPR can provide insights into not only the potential movement for the upcoming day but also how the prior day performed. Importantly, CPR levels are consistent across different time frames, remaining constant throughout the day regardless of whether you use a one-minute, five-minute, fifteen-minute, or hourly chart.
• 54:00 - 56:00: Power of Virgin CPRs in Trading The chapter discusses the central pivot range (CPR) and its applications in trading. It highlights that CPR is not only useful for intraday trading but also for swing trading. The chapter emphasizes the versatility and power of CPR as a trading tool, which can greatly benefit traders who understand its use. Additionally, it mentions the availability of a CPR indicator on TradingView by Gaumati Shangri, providing traders with a tool to implement CPR in their trading strategies.
• 56:00 - 57:00: Disadvantages of CPR The chapter titled 'Disadvantages of CPR' focuses on the use of trading view indicators, specifically for intraday trading. It emphasizes the importance of using daily pivots and previous day high and low levels as they can highlight potential interest levels in the market. The chapter hints at a detailed discussion on floor pivots and CPR (Central Pivot Range), identifying them as leading indicators.
• 57:00 - 61:00: Rules for Using Floor Pivots The chapter 'Rules for Using Floor Pivots' discusses the importance of price-based indicators in trading. These indicators use the earliest available price information, unlike traditional lagging indicators which confirm a market move only after it has occurred. As a result, traders relying on price-based indicators tend to identify reversals and take profitable positions before others. The chapter highlights floor pivots, camarilla pivots, and the money zone as examples of leading indicators, emphasizing that lagging indicators put traders at a disadvantage.
• 61:00 - 63:00: Breakouts and Gap Occurrences with Floor Pivots This chapter discusses the ease of plotting future pivot points in trading. Previously, calculating and plotting these points required manual calculations and was time-consuming. Now, traders can simply toggle settings in their trading software after the market closes to view the next day's pivot points. This feature aids in easier market analysis and helps traders make informed decisions.
• 63:00 - 72:00: NR4 and NR7 Strategy The chapter discusses the strategy involving NR4 and NR7, which are specific trading setups focusing on narrow range days. It delves into the importance of forecasting potential levels for the following day and formulating strategies for various possible scenarios. This proactive approach can be extended to different timeframes such as weekly or monthly for swing or positional traders by adjusting the pivot settings to weekly and monthly instead of daily. Additionally, the chapter hints at a deeper dive into pivot relations and how understanding pivot width forecasting could enhance strategic insights.
• 72:00 - 74:00: Correlation-based Trading Strategy The chapter discusses the importance of understanding prior day's trading activity to forecast future market movements. It emphasizes that a wide range of movement in the prior session, such as during a trending day, results in wider pivots for the following day, indicating a larger distance between the top and bottom central pivots.
• 74:00 - 75:00: Concluding Remarks In the chapter titled 'Concluding Remarks', the text discusses the relationship between the market's price action and the behavior of pivots in trading. It explains that if a market session has high volatility or a wide trading range, it often leads to a day with little price movement, termed as a 'range day' or 'sideways day'. Conversely, on a very calm trading day, the pivots for the next day become quite close, often resulting in a more dynamic market movement such as a 'trending day' or a 'double distribution trend day'. This suggests a tactical consideration for traders in anticipating market behavior based on previous price sessions.

The only 'CPR' video you will ever need | CPR & Pivot Points | CPR Strategy | CPR Indicator | Pivots Transcription

• 00:00 - 00:30 hey guys welcome back to the channel in today's video i will talk about cpr which is a revolutionary level based indicator that can change the way you approach trading and the way you see the charts and improve it big time we will learn about the cpr and floor pivots in greater detail with more emphasis on cpr indicator in particular so that you can create your edge over other market participants the video is going to be
• 00:30 - 01:00 longer than usual but trust me it's going to be worth it also watch it till the end and if you haven't subscribed to the channel yet please make sure to subscribe and enable the bell icon so that you won't miss out on any upcoming videos also share it with your friends and fellow traders well then this video will cover the following topics we will start our discussion with the basics of cpr indicator followed by the calculations of cpr and what exactly does this calculation mean to a trader
• 01:00 - 01:30 then we will move on to the advantages of cpr and then to the uses of cpr we will also discuss the significance of cpr indicator and we will shortly peek into the disadvantages of cpr then we will discuss about the general criteria for using floor pivots and finally we will end the video up with two cpr strategies that you can apply in the market so without wasting any time let's get started before starting with cpr we have to understand how it came into being for
• 01:30 - 02:00 that we should start our journey from floor pivots see floor pivots have been around for a long time and many traders have used these pivot levels to master the market for decades larry williams the famous stock and commodity trader repopularized this formula of floor pivots by including it in his book how i made 1 million dollars last year trading commodities in the year 1979. in the book he described the pivot price formula which he used to arrive at the
• 02:00 - 02:30 next day's probable price range that is the high or the low nowadays these pivx can go by many names in the market including pivot points floors or just pivots but we will call them floor pivots the reason for this is simple but interesting because they came popular once traders on the floors of the exchanges began to use them the pivots served as a simple way for these float traders to forecast the particular day's potential support and resistance levels
• 02:30 - 03:00 since they didn't have sophisticated computers and softwares on the floors of the exchanges back then another reason is that this name helps to distinguish them from other types of pivot points now coming back to the details floor pivots are extremely powerful price based support and resistance levels that are calculated using a prior periods high low and close prices actually it offers an amazing way to view the market they're like maps for the market revealing the moves of the market even
• 03:00 - 03:30 in the most uncertain times so when we begin to study the pivots on a much deeper level you will begin to observe the parallel nature that exist between the floor pivots and the price behavior now you may ask me why in the world should i believe that these levels will work on the market the main reason these pivots can be so unbelievably accurate is the simple fact that market participants are aware that these levels exist now they are watching them and trading these key levels every now and
• 03:30 - 04:00 then it all boils down to the trader psychology and human nature for that matter which has remained the same for centuries and the factors that run the market are the same fear greed hope and uncertainty these are the reasons why traders continue to react to these key levels in the chart the same way over and over again this is also the reason why these pivots have stood the test of time and will continue to work in the future now let us look at the standard
• 04:00 - 04:30 floor pivots and then take our learning to a whole new level with slight modifications to the same i will guide you through these topics based on my learnings from the very famous book secret of pivot boss by franklin ochova for whom i am deeply inducted to and i urge you to read the book because it has got a lot of valuable insights for all types of market participants as i have mentioned even though the floor pivots have been around for decades they can still cause confusion
• 04:30 - 05:00 due to the fact that there are several variations of the formula that can be found in the market however there is one such formula that is widely considered to be the standard one so all you have to do is to plug in the high low and close of a prior day or a week or month depending on the time frame on which you want to conduct your analysis and the formula will automatically calculate the central pivot three resistance levels from r1 to r3 and three support levels
• 05:00 - 05:30 from s1 to s3 that can be used for the current days trading activity that is seven pivot levels will be plotted on your chart now do you know why the high low and close are used for the equation it is simply because they are the most important values for any given time period whether it is a single five minute candle or an entire day or an entire month in fact the high and the low represent the most bullish and bearish expectations for the market for a given period of time thus making these
• 05:30 - 06:00 values an important reference point for the equation likewise where the price closes gives an insight into the collective behavior of the market while heading into a future period of time now take a look at these equations the pivot is calculated as an average on the three significant prices in a prior trading period or a prior trading day all the other values are calculated from this basic value of the central pivot totally the standard floor pivots provides a lot
• 06:00 - 06:30 of vital information about the prices but in order to make the indicator exponentially more dynamic and responsive we have to focus on some modifications first of all given today's volatile markets just a third level of support and resistance can be quite shallow due to the explosive moves we see today as a matter of fact the volatility was less of a factor in the late 1980s and all when the formula that larry williams produced offered only two levels of support and resistances
• 06:30 - 07:00 however it is not going to gauge the moves that we experience these days so we can add a fourth level or even a fifth level for that matter of support and resistances to the equation that falls in line with the general theme of original levels so the addition of this fourth level of support and resistance helps to provide an extra target for those days when the market has exploded through the third layer of the pivot levels on top of that taking the concept of pivot range from mark fisher's book
• 07:00 - 07:30 the logical trader we can include a top and bottom pivot in relation to the central pivot of the indicator which by itself is extremely powerful now these are the expanded floor pivots which consist of a total of 11 levels the central pivot range or cpr is an indicator that is used to identify key price levels to set up rates cpr is quite beneficial if you are an intraday trader the cpr consists of three
• 07:30 - 08:00 components a central pivot a bottom central pivot that is below the central pivot and a top central pivot that is above the central pivot all these levels are derived out of the underlying high low and close calculations of the previous day so the central pivot is the average of the high low and close while the bottom central pivot is the average of high and low of the previous day while the top central pivot is the sum of the pivot and the difference of pivot and the bottom central pivot if you
• 08:00 - 08:30 understand the formula closely one thing you will instantly notice is that these equations are simple averages and manipulation to these averages so as a thumb rule in any technical indicator the moment you see averages you need to associate the indicator with an underlying trend the cpr indicator does just this that is it helps the trader identify key price points and the associated trend around these price points but there is a lot more to cpr which makes it extremely special we will
• 08:30 - 09:00 get back to this in a bit but let us briefly discuss the advantages of cpr first the cpr is absolute without a doubt the most powerful part of floor pivots indicator at any given time the cpr range can be a support or resistance to the prices it can also help to forecast with a good degree of accuracy if the next day will be having a trending or sideways price behavior can also dictate
• 09:00 - 09:30 the price direction and also the price momentum the cpr can tell you so much about the potential movement of the upcoming day and even how the prior day performed moreover cpr is the same in all time frames or these levels are constant throughout the day for example if you have used the previous day data for the calculation of today's cpr then the cpr will remain the same in the one minute chart five minute chart or 15 minute or even one hour charts for that day and it does not change as constant
• 09:30 - 10:00 values are used for calculation many people think that the central pivot range is helpful only for intraday trading but this is not true there are many traders out there who use cpr for both indra day as well as swing trading and it is also a very powerful concept that can be very beneficial to every trader if he knows how to use it correctly so if you are using trading view then you can make use of the cpr indicator by gaumati shangri from the
• 10:00 - 10:30 trading view indicators library i personally use it myself now in the indicator setting there are a lot of options to select from but from an intraday perspective we are only interested in the daily pivots and maybe you can also use the previous day highs and lows as these can be potential levels of interest in the market don't worry we will discuss all of this in greater detail as we go through this video one of the main characteristics of floor pivots and cpr is that these are leading
• 10:30 - 11:00 indicators traders who use price based indicator are using the earliest price information available traditional indicators are usually lagging indicators which means that as soon as they confirm a move most price based traders have already identified a reversal and are already profiting in their trades so the truth is that the best leading indicators are always price based beat the floor pivots the camera lot the money zone etc anything lagging and you will be trading from the back of
• 11:00 - 11:30 the crowd instead of leading from the front in addition to that the fact that you can plot the next day's pivot is a breakthrough back then it was a time consuming task that included putting in values to the equations and plotting the lines in the chart but now it is extremely easy all you have to do is to uncheck the daily pivots from the indicator settings after the market closes in the evening and then enable tomorrow's pivots and you can straight away view tomorrow's ranges and levels with ease this will help you analyze
• 11:30 - 12:00 where the potential levels are for the next day and plan for different situations beforehand and set a strategy for each of these situations that is possible the idea can be extended to other time frames also in case of swing or positional traders by simply enabling the weekly and monthly pivots in contrast to the daily pivots this idea of forecasting can get even better when we discuss pivot relations but first let me talk about pivot width forecasting
• 12:00 - 12:30 since the prior days trading activity leads to the creation of today's pivots it is extremely important to understand how the market behaved on the prior day in order to forecast what may occur in the upcoming session so more specifically if the market experienced a wide range of movement in the prior session as with our trending day the pivots for the following day will likely be wider than normal meaning that the distance between the top central pivot and the bottom central pivot will be
• 12:30 - 13:00 very high or wide which will usually lead to a range day or a sideways day where not much price action is expected conversely if the market experiences a very quiet trading day in the price session the pivots for the following day are likely to be unusually tight or narrow meaning that the top and the bottom central pivots will be very close to each other and will be very close to the central pivot also which will typically lead to a trending day or a double distribution trend day where
• 13:00 - 13:30 either a clear trending price action is visible or potential range breakouts and rallies are possible during the session so it is important to understand the pivot width concept as this information allows you to prepare properly for the specific date types in the upcoming session so if you are able to anticipate the market's likely behavior you are giving yourself the best chance at success because you are able to deploy specific trading setups that are tailored for certain types of days so
• 13:30 - 14:00 anytime you have an idea of how the market will behave in the following session you are giving yourself and significant edge over the other traders so as i have mentioned when describing the width i am referring to the distance between the top central pivot and the bottom central favorite that is tc minus bc typically an extremely tight central pivot range indicates that the market traded sideways or consolidated in a prior period of time as such this price behavior usually leads to a breakout or
• 14:00 - 14:30 trending behavior in the following session and conversely an extremely wide central pivot range indicates the market experienced a wide range of movement in the prior day which usually leads to sideways or trading behavior in the following session as i mentioned an important factor to note however is that the pivot width analysis works best when the range of the prior price movements is distinctly high or low thereby creating unusually wide or unusually narrow pivots what this means is that it
• 14:30 - 15:00 must be clear that the width of the pivots is either abnormally wide or extremely narrow as these are the sessions that grant us a higher probability of forecasting success if the pivot width is not distinctly wide or narrow it becomes challenging to predict the potential trading behavior with any degree of certainty for the next session so you must also keep this in mind that this analysis is not without fault measuring pivot width gives you a significant edge in
• 15:00 - 15:30 determining the potential behavior for the upcoming session but unlike any form of technical analysis this method is not always correct therefore it is best to use it as a guideline now let us take a closer look at the pivot width relationship that can lead to one of the most explosive days in the market the narrow pivot range relationship so an unusually narrow pivot range is formed when the top bottom and central pivots overlap each other and it usually indicates that the market is all set for
• 15:30 - 16:00 an explosive breakout opportunity therefore it becomes highly beneficial to know when this relationship has formed if you have studied the chart patterns and price action you will understand that the consolidations and trading ranges leads to breakouts and range expansion essentially what a tight pivot range is telling you is that the prior day was consolidating which usually leads to a breakout on the day with the narrow pivot range given the
• 16:00 - 16:30 right opening circumstances and also if you observe the charts most trending days occurs when the central pivot range is considerably tighter than the prior days range especially if the prior day's range is unusually white so you can make use of screeners to look for narrow cpr in charts and then go on to each chart to analyze them do keep in mind that the more narrow the range the stronger the expected trend or the price move will be
• 16:30 - 17:00 understanding how the current day cpr relates to the prior day cpr will help you go a long way towards understanding the current market behavior as well as future price movements actually there are seven types of pivot range relationships that should be considered when analyzing the current strength and the attempted direction of the market so these seven relationships are the higher value relationship the overlapping higher value relationship the lower value relationship overlapping low value
• 17:00 - 17:30 relationship unchanged value outside value and inside value relationships each pivot range relationship brings with it a directional bias or an expected outcome which you can prepare for certain types of trading scenarios in the upcoming session each of these seven pivot range relationships depend on two important prices the prior day's closing price and the current day's opening price where the market closes in relation to the pivot range gives you an
• 17:30 - 18:00 initial directional bias for the following session which you can actually plan for after the market closes but it is only the next day's opening price that will either confirm or reject this bias that you had which then gives you an opportunity to adjust for which type of trade you should be prospecting to now let's take a look at the first two day relationship which is the higher value relationship this relationship occurs when the current day's pivot range is completely higher than the prior day's pivot range this means that
• 18:00 - 18:30 today's bottom central pivot is higher than the top of the prior day's pivot range this is the most bullish relationship of these seven two-day combinations therefore when this relationship develops your initial directional bias will always be bullish also if the price closed above its pivot range in the prior session then we can expect that the market is positioned to move higher in the upcoming session however as i have mentioned earlier how the market opens the next day will
• 18:30 - 19:00 either confirm or reject this initial bias so if the market opens the day anywhere above the bottom of the pivot range you will only look for buying opportunities preferably at a pullback to the range ahead of a move to the new highs this is especially the case if the price opens above the top of the range the simple fact that the price opened the day above the bottom of the range indicates that the market sentiment remained bullish overnight when this occurs any pullback to the range will likely be met with a responsive buying
• 19:00 - 19:30 activity but if the market had opened the session below the central pivot range then a completely different outcome would have been the result that is the price may face a resistance at the cpr and as a result it can push the price lower because a change in the market sentiment has occurred overnight that caused the price to open below the range the next pivot range relationship is the overlapping higher value relationship which offers a moderately bullish outlook for the upcoming session
• 19:30 - 20:00 now this relationship occurs when today's pivot range is higher than yesterday's range but it overlaps to some degree therefore the top of the range is higher than the top of yesterday's range but the bottom of the range is lower than the top of yesterday's range the same closing and opening price dynamics are in effect for this relationship as well so if the market closes above its range in the prior session a bullish bias should be assigned to the following day however where the market opens in the following
• 20:00 - 20:30 session will either reject or accept this directional bias that we have had the next type of pivot range relationship is the lower value relationship which occurs when the current day's pivot range is completely lower than the prior sessions range this is the most bearish two-day relationship and it typically leads to further weakness given the current days opening price confirms the directional bias that we have so if the price opens the session below the cpr we will be looking
• 20:30 - 21:00 for shorting opportunities at any pullback to the range ahead of a drop to the new loss within the current trend when you see a two-day relationship that is clearly a lower value situation it points to continued weakness in the upcoming session as mentioned the bias is confirmed by the fact that the price closed below the pivot range moreover the price opens the current session below the cpr which offers the best opportunity to sell a pullback if at all the price test the pivot range even
• 21:00 - 21:30 though the lower value relationship is the most bearish two-day relationship the opening price plays a very crucial role in confirming our bearish bias that is if the price somehow opens above the cpr it indicates a drastic shift in the market sentiment overnight and there is a great chance that the pivot range can now act as a support which can initiate responsive buying to the upside the next two-day relationship is the overlapping lower value relationship
• 21:30 - 22:00 this occurs when the current day's pivot range is lower than the prior days range but overlaps to some degree that is the current day's bottom central pivot is lower than the bottom of the prior days range but the top of the current day's range is higher than the bottom of the prior days range now this relationship indicates a moderately bearish outlook for the upcoming session that is if the price opens within or below the pivot range the price is expected to continue lower and any pullback to the range
• 22:00 - 22:30 should be seen as a selling opportunity and the closing and opening price dynamics are in effect for this relationship as well that is if the market closes below the range in the prior session a bearish buyer should be assigned for the following day however where the market opens in the following session will either accept or reject our directional bias moving forward the two-day unchanged value relationship occurs when the current pivot range is virtually unchanged from the prior days range of
• 22:30 - 23:00 the seven two day relationship this is the only one that can project two very different outcomes on the following day on one hand a two-day unchanged pivot range indicates that the market is satisfied with the continuation of trade within the current or the existing range when this occurs the market will trade quietly within the boundaries of the existing two or three day trading range on the other hand however a two day unchanged pivot range relationship can also indicate that the market is on the
• 23:00 - 23:30 verge of a major breakout opportunity now the outcome of this situation is typically driven by the opening price of the current session so if the market opens the day near the prior sessions closing price but well within the prior days range the market will most likely lack the conviction necessary for a breakout attempt but if the opening occurs beyond the prior day's range or very close to the range then the chance of a breakout opportunity cannot be denied the outside value relationship happens
• 23:30 - 24:00 when the current day's pivot range completely engulfs the prior days range this two-day relationship typically implies sideways or range trading activity as the market is happy with the current facilitation of the trade in the current price range the huge width of the pivot range will also lead us to this conclusion as well since a wide range will usually indicate range trading behavior where the prices basically trade sideways quietly throughout the day when this two-day relationship develops you can look to
• 24:00 - 24:30 execute short straddles or short strangles to benefit from the premium decay an exception is when a clear trading range has been formed which can offer nice intraday moves within the boundaries of an established range where you can profit from short scalping trades an important thing to keep in mind is that this relationship is much more revealing if the current day's price range is significantly wider than the prior days range otherwise just merely engulfing the prior days range
• 24:30 - 25:00 without the necessary width may even lead to the same result but with a very less accuracy the last two-day pivot relationship is the inside value scenario which occurs when the current day's pivot range is completely inside the prior days range this two-day relationship typically implies a breakout opportunity for the current session as the market is likely to attempt a breakout if the market opens the day beyond the prior days range there is a very good chance that the initiative participants will enter the
• 25:00 - 25:30 market with conviction in order to push the prices to new values since the market sentiment seems to have clearly changed overnight as indicated by the opening price this two-day relationship does not occur very frequently but on days when it develops these usually leads to major trending sessions now the two-day pivot range relationships offer guidelines for trading mutually any type of market condition be trending breakout and trading range but it is up to you to
• 25:30 - 26:00 properly interpret the 2-day relationship and apply confirmations before entering a trade this is one of my favorite ways of using pivot ranges in charts using the cpr to gauge the market trend is extremely powerful you may know from the basic price structure that an uptrend is characterized by higher highs and higher lows of the price swings while a downtrend is associated with lower lows and lower highs of prices when it comes to the pivot ranges we can think of
• 26:00 - 26:30 ascending pivots in case of an uptrend where the centrals form a higher value relationship or an overlapping higher value relation where the prices continue higher on the flip side we can think of descending pivots in case of downtrend where the central ranges form a lower value relation or an overlapping lower value relation and the prices fall lower as a matter of fact i can remove the price from the chart leaving only the central pivot range and even then you should be able to tell what the market
• 26:30 - 27:00 is doing and still make money you can easily see the trends of the market and make money by only trading the direction of the prevailing trend as you already know by now the cpr can be one of the best sources of support and resistance in the market due to this fact they can control the tide of the trend another thing to notice is how the price remains above or below the central pivot range throughout a trend until it either stores or changes direction so a strong trend can be usually cased by how the
• 27:00 - 27:30 price remains at or above the bottom central pivot in an uptrend and at or below the top central event while in a downtrend once the price violates this pattern by closing beyond the range for the day we can observe either a change in the trend or a trading range market develop now this behavior is a blessing for most swing traders as they could enter the market once the pivot range is violated and then trade in the direction of the newly developed trend while holding their stop losses just beyond
• 27:30 - 28:00 the opposite side of the central pavement range for example you can catch majority of uptrend using the pivot range by keeping the stop loss below the bottom central pivot you would remain in the uptrend up until the prices close below the bottom central pivot at which point you would liquidate your trade one of the most common signals that you get associated with a change in trend direction is due to a narrow range cpr breakout so if you know about the different market stages starting from accumulation followed by markup or
• 28:00 - 28:30 uptrend then by distribution to markdown and finally accumulation again and if you don't know about it you can watch this video on market structure from my free price action trading course do check that out after this video now after a period of uptrend for example two things can happen the market will take a breather thereby forming a range or consolidation for a few days now the problem is that this can either be an accumulation phase or a distribution phase now if this is a reaccumulation
• 28:30 - 29:00 phase then we can expect a continuation of the uptrend but if this is a distribution stage then a reversal towards the downside is in play this is where the narrow cpr comes into picture so if you observe the charts most often before a trend continuation or reversal after consolidation price forms a narrow range thereby forming a very narrow cpr due to which the prices explodes on that particular day giving an idea about the direction in which the market will move
• 29:00 - 29:30 in the upcoming sessions in simple words the narrow cpr decides the market trend for a short term now you can use all these observations from the study to improve your analysis for the next day nowadays on most trading days the market gaps at the open of the session when this occurs you have two options either to take a potential breakaway move from one of the floor pivots or you can wait for the market to fill the gap in either case a gap at the open indicates that
• 29:30 - 30:00 the market sentiment has changed overnight one important feature of the cpr is that it has an amazing magnetic effect on the price which leads to a high percentage fill of the morning gaps so i have mentioned that cpr is an average price based level so the central pivot range is the equilibrium of the market for that particular day so if the price opens the day with a gap and the centrals are very close to the prior day's closing price you typically see a fill of gap a high percentage of time
• 30:00 - 30:30 given the right circumstances this is like a magnet attracting iron nails the centrals attract prices causing the gap to fill so all we have to look for is responsive market participants to enter the market and push the prices to the central range or in other words we have to look for price rejections of newer values and let the market return to the fair value which is actually the central range now while this trade looks simple there are a few additional tips that can
• 30:30 - 31:00 help make this trade even more powerful as well as profitable so for instance trading the right size gap greatly increases the success rate of the setups the gaps that are too large don't tend to fill as easily as those that are moderate in size so it is better to stick to those caps that have a fighting chance to fill and the pivot range will do the rest secondly the pivot range placement should be at or very near to the prior days closing price so when this is the case the pivot range helps
• 31:00 - 31:30 to attract the price to fill the gap also you must remember that the goal of the trade is to play for a fill of cap back to the cpr which means the trade will be usually very short this indirectly means that you don't have to wait all day for a gap to fill because the longer the trade takes the more unlikely the gap is to fill another important point to notice that the trend can also play an important factor in the successful outcome of a magnet trade if you recall from the trend identification
• 31:30 - 32:00 part when a market has formed an established trend the price will usually pull back to the pivot range before assuming in the direction of the trend therefore if the market has formed an uptrend and the price gaps up in the direction of the trend there is a very good chance that the price will drop to the pivot range before another round of buying pressure is seen thereby causing to fill the gap this market behavior lines up perfectly with the idea of magnet rate another important factor to consider when trading this setup is
• 32:00 - 32:30 looking for additional pivot confirmations that can add to the success of your trade so if the price caps up to r1 resistance or gaps down to s1 support these four pivots can serve as a barrier to the breakout rate which usually leads to a high percentage of gaps getting filled so knowing where the support and resistance levels are can help you give confidence in entering a trade especially if the market gaps up at the open on the contrary any gap beyond these r1 and s1 levels these
• 32:30 - 33:00 levels will resist the price from reverting to the cpr and thereby eliminating a magnet trade a cpr is called a virgin cpr and all the candles on a particular trading session have closed either upside or downside of the cpr and none of the candles closed at the cpr meaning that the cpr range was not tested even once in the entire session a virgin cpr can act as a strong support or resistance for the subsequent
• 33:00 - 33:30 few trading sessions so whenever you see a virgin cpr on a stock or an instrument you can extend it or mark it for the upcoming sessions so when the price comes to that virgin cpr level you'll probably see a very strong reversal this is a powerful level to look forward to as the price will respect this level once it reaches it and will most probably reverse from it now one of the disadvantages of cpr is that you will not get a good result in a
• 33:30 - 34:00 penny stock or a small cap stock because of the lack of participation or volume which makes these levels less useful so it is best to stick to indices like nifty and bank nifty and those stocks only which has a good enough volumes this is directly related to the way these levels works as it is depended directly upon the psychological value that the market gives to these levels and the more number of people observing these levels the better it will work
• 34:00 - 34:30 another disadvantage is that you will not get an entry or exit solely from cpr so cpr can act as a support of resistance to prices so it is difficult to judge the trade direction within the cpr and it is advisable not to take trades with a directional bias from inside the cpr range instead we will use floor pivots for planning our entries exits and stop losses we will now take a look at some of the general rules that we can follow while using the floor pivots for trading
• 34:30 - 35:00 buy it support in an uptrend and sell at resistance in a downtrend this is the most basic way of using floor pivots that can be easily overlooked but it is one of the most powerful concept that you can take away from using pivots essentially we will discuss the concept of pivot filtering based on the current trend of the market in a sense we can filter out all other floor pivots below s1 while keeping the central pivot range and resistance levels in the market is in an uptrend in a downtrend all pivots
• 35:00 - 35:30 are filtered above r1 while keeping all support levels and the central pivot range basically filtering the pivots in this manner forces you to become disciplined to the trend which increases your chances for a profitable outcome the filtered pivots allow you to focus on playing the pivots that are more prone to reversals with the corresponding trend that is if you remove all the pivots below s1 support you are forced to remain disciplined to a bullish trend by looking for long
• 35:30 - 36:00 opportunities at s1 and the central pivot range likewise removing all pivots above r1 forces you to prospect in the direction of a bearish trend only looking for short opportunities from these levels this seems like a very simple concept but many traders can lose focus of the trend through all the noise that comes along with trading the fact that when the market is moving within an established trend certain pivot points become retired for that particular trend it is at this point that your focus
• 36:00 - 36:30 should shift to the pivots that are active for key trading opportunities for example in a bullish trend any pivot level below s1 level is literally useless on your chart since these levels are not tested during a true bullish advance likewise any level above r1 is just noise during a bearish trend as these levels are rarely tested during a true price decline therefore if the market is trending higher you will look to buy at the support at either s1 or
• 36:30 - 37:00 central pivot range with your target set to r1 or r2 levels likewise if the market is trending lower you will look to sell at the resistance at either r1 or the central pivot range with your target set to a new low at either s1 or s2 you see trending markets have a very interesting dynamic when it comes to pivots as you have already seen the market will remain strictly above s1 in a bullish trend and below r1 in a
• 37:00 - 37:30 bearish trend however once a severe breach occurs through the first layer of pivots you will see a shift of the trend towards the opposite extreme that is a bullish trend becomes a bearish trend and a bearish trend becomes a bullish trend this type of analysis is extremely powerful for all type of traders including intraday swing opposition traders another thing is when we are trading breakouts using floor pivots what we are actually looking for is to
• 37:30 - 38:00 see a gap occur between the prior days range and value preferably just beyond the first layer beat r1 or s1 of the indicator in addition to that the gap should not be overextended beyond the second layer of pivots that is your chances for a trend day scenario increases if the gap occurs beyond r1 for a bullish breakout play or if it forms below s1 for a bearish play if the price gaps to the second layer we will consider the trade only if the price
• 38:00 - 38:30 test any of the previous pivot levels that were surpassed via the gap and further move in the direction of trend with clear indications using candlesticks like pin bar setups and if the price gaps too far beyond these levels i would rather avoid trading on that day because usually in such scenarios market will begin to move sideways the first strategy that we will discuss is the nr4 nr7 strategy nr4 stands for narrow range 4 and nr7 stands for narrow
• 38:30 - 39:00 range 7. this is a very popular strategy and it is one of those strategies that helps to find the calm so that we can prepare and profit for the impending explosive price movement we know that the market goes through regular contraction and expansion cycles in this trade setup we should patiently wait for the market to enter into the contraction phase which is associated with a reduction in the range of the candles generally we conduct the analysis based
• 39:00 - 39:30 on the daily range of the candles so the time frame that we use for our analysis will be a daily time frame now the narrow range trading strategy is a breakout based method which assumes that the price of a security trends up or down after a consolidation in a narrow range we know from the previous sessions that when the range of the candles becomes lower the cpr becomes narrower which in turn confirms that a trend breakout is in picture so the philosophy
• 39:30 - 40:00 behind this pattern is same as bollinger band squeeze which is a volatility contraction followed by a volatility expansion so if you want you can watch about this squeeze concept in the bollinger bands video now let us understand what exactly is nr4 and nr7 now the following are these steps to identify an nr7d first of all you have to get the high and low data of the last seven days then then calculate the range for each day now the range as we know is
• 40:00 - 40:30 calculated as the difference between the high and low of the particular day now compare the range of today and the previous 6 days range if today's range is smallest of all the 7 days that has been considered then today is an nr7 day else it's not similarly when it comes to identifying an nr4 day you have to get the high and low of the last few days then we have to calculate the range for every day and compare the range of today
• 40:30 - 41:00 and the previous three days range now if today's range is the smallest of all the four days that have been considered then it is an nr4 day else it's not now one thing that we can observe is that as the range gets narrower so does the cpr levels so our objective is to look for narrow cpr which gets formed inside the range of the previous day cpr thereby forming an inside bar like setup in the candlesticks i would say an inside value
• 41:00 - 41:30 narrow range cpr is very much stronger than just a narrow cpr that is formed at a random location in some occasions there will be more than one inside cpr or inside bar candles which gets formed and this is an indication of a bumper trade because the market has contracted so much in volatility that there will be a very strong price move expected in either direction now the direction of the price move is judged based on the previous day closing price with respect to the cpr the two-day cpr relationship
• 41:30 - 42:00 and the overall market trend the trade idea here is quite straightforward like the one that we adopt with an inside bar we will look to buy if the price breaks above the high of the previous candle and we will place the stop loss below the low of the nr4 or nr server candle and try to capture the entire trend by trailing your stop-loss at 1.5 atr level below the candle on the other hand if the price breaks below the inside bar
• 42:00 - 42:30 candle then we will look for a short trade below the law of the nr4 or nr7 candles keeping our stop loss above the high of the narrow range candle that we have considered here also we will look to write the entire trend by trailing our stop loss even in case of a gap up or gap down opening also the trade setup will remain the same as a bonus in order to identify the stocks with these trade opportunities you can search for nr4 nr7 range screeners like those available in
• 42:30 - 43:00 charting and after finding such stocks you can analyze if it fits your requirement and if it does then you can keep it in your watch list for tomorrow's trading session the correlation rate setup is a very interesting trade setup which is extremely profitable but at the same time rare in occurrence now the idea is to use correlation associated with the index and its stocks in this case i will discuss only about bank nifty we know
• 43:00 - 43:30 that the bank nifty index is the index that tracks the banking sector comprising of 12 banking stocks of which the first five stocks which includes htfc bank icic access cortex and spi which contributes about 85 percentage of the total weightage and the top three banks contributes 62 percentage of the total weightage in magnifique now the trade idea is to use this relation if at least two of these heavyweight banking stocks forms a narrow range for the
• 43:30 - 44:00 following session we can expect a similar price action in bank nifty index also do keep in mind that we have to look for very narrow ranges in order for a trending day to play out the next day with a good amount of confidence so if two or three of these stocks and the index forms a narrow range cpr and in addition if there is also an inside value relation then we can expect breakouts in all these scripts and as a result the index will move with a lot of momentum in either direction depending
• 44:00 - 44:30 upon the stocks in such a situation you can take a trade in any or all of these scripts or you can just focus on the index as it will move with a consolidated strength and gain a good amount of profits now it is up to you to properly interpret the cpr and floor pivots and apply proper conformations before entering a trade the faster you recognize the pattern of the market the faster you will be able to deploy your strategy because anybody can plot the
• 44:30 - 45:00 floor pivots and cpr on their screen but only those traders who have a keen understanding of the market's behavioral tendencies with respect to the pivots will profit by using these amazing levels however with continued practice every opportunity will become an obvious opportunity do put in the effort to learn deeply then back test on multiple charts and then test it out in the market by trading real time or paper trade and improve yourself and your strategy i
• 45:00 - 45:30 hope this video was useful to you if then please do like the video and share it with your fellow traders don't forget to subscribe to the channel and enable the bell icon so that you won't miss out on any upcoming videos i will see you guys in the next video till then see