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.. 🙂

Nifty Futures Support and Resistance Levels – February 1, 2011

Support – 5351.55, 5312.50, 5273.45 and 5234.40

Resistance – 5585.95, 5625, 5664 and 5703.15

Midpoint price which may serve as resistance / support – 5468.75

The support prices are a bit steep. Kindly look at the floor pivot points for this day – it is also providing prices in this range. Will the market tank to these levels today?

On the other hand, the first resistance point 5585.95 is easily achievable today if the market keeps up the momentum displayed during the last hours of yesterday.

All the best. 🙂

Update (16:05): I did not enter the trade today as the contract did not touch any one of the values listed. However, I am relieved that I did not lose anything to the markets! Every day need not be a trading day. We have to wait for the right set of opportunities. Let us see how the day turns out for us tomorrow.

Until then – good day to you!

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