Camarilla Equation For Daytrading (Revisited)

I precisely remember posting something regarding camarilla equations some months earlier. Those who are interested in reading it, may find it over here.

This time, I am making other post concerning the same set of equations.

I was attracted to camarilla equations right from a very early stage of my trading career. This is one of the reasons why I opted for the paid trial service from surefirething (the original website where camarilla subscription service is present).

The thing I like about this equation is its simplicity. As truly mentioned in the official website, gaining access to the equation and using them in an effective manner will put us in par with those who have had many years of experience trading in the markets. The equations are short-cuts to successful trading.

One of the belief system that I hold on to regarding daytrading is the following – if you wish to succeed in this niche, you need to do your own homework. And by doing homework, I am not asking the readers to spend time trying to tweak the existing indicator systems. What I imply is something lucid – stay simple. I know a bunch of daytraders who primarily rely on floor pivot points and other “elementary” systems to take trading decisions everyday. These are highly acclaimed professionals who are making serious money in our as well as international markets.

I have done my share of homework regarding camarilla equations. In the process I learnt that these equations are primarily based on the Fibonacci ratio 27.5%. If you dissect the equation, you too can test the authenticity of the previous statement.

Another thing which I have learnt is the role of closing price in the equation. It is actually confusing to the novice traders. I have read a couple of statements which depict that any volatile market has a tendency to revert to its closing price. On the other hand, I have also read that markets always tend to come back to the “mean” value. The original inventor of the equation took the previous day’s closing price as the mean value. However, is that the real value that we must consider?

I would like to point out to the readers the right direction – the path of making consistent profits through daytrading. Once again, I emphasis on this point – please experiment with the equations. For instance, (Tip 1) replace the closing price with the current day opening price. Likewise, you can keep on finding alternate values to take up the place of the closing price. You may be surprised at the accuracy levels.

Likewise (Tip 2) replace the closing price with the average of yesterday’s range i.e. (high price + low price)/2. This is more like a logical approach especially when you consider the breakout / breakdown regions. When you substitute the average of yesterday’s range instead of the closing price, you will find that the breakout / breakdown regions are always higher / lower than yesterday’s high / low price.

Keep on experimenting with the equations…I am certain the intelligent ones will find out ways to exploit the system to their benefit.. 🙂


Daytrading With Camarilla Equations and Levels

When people begin day trading for the very first time in their lives, they are bound to lose money everyday. Or at least on most of the days. The losses will always be too much for them to digest. Actually this stage acts as a filtration – many will frown and leave the arena while the rest try to survive the battle.

There is a stage in every trader’s life when they will hunt for the so-called “holy grail”. They will notice that everyday, the market will move certain levels. They will also come to the conclusion that there are certain “nefarious elements” within the market who control the movement of the prices. The intention of this section is not to dispute those aspects.

When I was first introduced to the Camarilla Equation, I was spellbound. Using yesterday’s high, low and closing price, we could determine the movement of the market (for the next day) – this is the entire idea behind the so-called equations. Once I came across these equations, I decided to check it out by myself the following day. I noticed that the stocks / index futures would follow the equations beautifully on certain days. On most of the other days, it would simply hover around these points and fall down / rise up drastically. Search around and you will come across hundreds of blog posts and forum threads highlighting the usefulness of the equation. But, is it worth it? I decided to give it a test run.

I did something simple – I decided to obtain the information from the horse’s mouth – aka I subscribed for one week trial offer from Surefirething. Why did I do it? There are several “variants” of the equations floating around. According to the official sources, we had to take into account the high, low, close as well as the opening price of the scrip. However, the versions available on the internet took only the previous day’s high, low and close prices. I wanted to know which one among these were the real deal. I thought the equations available freely on the inter-webs were not working as envisaged because we omitted the opening price while calculating the levels. The only way to find it out was to spend $99 for the trial service. And I did the same.

Now, I was fairly disappointed once I was admitted into the “members area” of the website. I started experimenting with the paid service to find out which one of the equations available for free were accurate. Of the four variants, only one gave the most accurate values. The rest of the versions of the equations displayed approximate values only. Secondly, the high / low breakout targets given by the website and the equations (which you will come across) are different. These were the only information which I was able to learn via the trial offer. No, I was not able to deduct the equations (for the high / low breakout targets) myself.

One thing is for certain – I wouldn’t be touching these equations with a ten foot pole for day trading purposes. Day trading is an art, something which cannot be expressed with a set of equations. There exists a unique relationship in between the price and the time. And this friendship in between the two keeps on changing as the day progresses.

I have come across several blog posts stating that banks and large financial institutions use these equations to day trade and make millions. The entire financial architecture of the globe would fail if it were true!

I hope this post is informative for those who are currently day trading with these equations. Lastly, I do not intent to ridicule their services. Feel free to trade with it and you will realize the truth for yourselves!

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