I would like to learn technical analysis, please suggest me some of effective technical analysis tools which should help me to trade intraday and positional. Suggest me some good tools must to learn. I can study those tools online.
Also please tell me about Camarilla trading levels. Can we depend on that levels.
I am trader doing stock futures.
use EMA 5 and 20 period
with stochastic(9,3,3) and rsi…
In my view, every beginner should start applying Technical Analysis by watching Pivot levels. This looks like a novice stuff but its very accurate and useful. There are many strategies based on Pivot points. Camarilla Pivot Points is a very popular Intraday Trading method originated in 1989 by Nick Scott. The pivot points generated using Camarilla equation are used to generate Intraday levels for the stock using the High,Low,Close values from previous day. This method relies on the principle of Mean Reversion, however it has a flavour of Trend following too. Its is highly accurate for volatile stocks with good intraday volume. See the below calculator for Camarilla Pivot Points. You just need to enter the High,Low,Close values from the previous trading day for the selected stock and the pivot points would be calculated automatically.
Check the below link for Camarilla Pivot Point calculator online:
Camarilla Pivot Points Calculator Online - Trading Tuitions
Camarilla Equation Levels
The Camarilla Equation produces 8 levels from yesterday’s open, high, low and close. These levels are split into two groups, numbered 1 to 4. The pattern formed by the 8 levels is broadly symmetrical, and the most important levels are the ‘L3’, ‘L4’ and ‘H3’, ‘H4’ levels. While day trading, traders look for the market to reverse if it hits an ‘L3’ or ‘H3’ level. They would then open a position AGAINST the trend, using a stop loss somewhere before the associated ‘L4’ or ‘H4’ level. To calculate Camarilla Equation levels use the calculator at the top of this post.
The second way to try day trading with the Camarilla Equation is to regard the ‘H4’ and ‘L4’ levels as ‘breakout’ levels – in other words to go WITH the trend if prices push thru either the H4 or L4 level. This essentially covers all the bases – Day Trading within the H3 and L3 levels enables you to capture all the wrinkles that intraday market movement throws up, and the H4 – L4 breakout plays allow the less experienced trader to capitalise on relatively low risk sharp powerful movements.
How to Trade based on Camarilla Pivot Points?
Look at the opening price for the stock/futures/commodities/currency.
Scenario 1
Open price is between H3 and L3
For Long
Wait for the price to go below L3 and then when it moves back above L3, buy. Stoploss will be when price moves below L4. Target1 – H1, Target2 – H2, Target3 – H3
For Short Sell
Wait for the price to go above H3 and then when the price moves back below H3, sell. Stoploss will be when price moves above H4. Target1 – L1, Target2 – L2, Target3- L3
Scenario 2
Open price is between H3 and H4
For Long
When price moves above H4, buy. Stoploss when price goes below H3. Target – 0.5% to 1%
For Short Sell
When the price goes below H3, sell. Stopless when prices moves above H4. Target1 – L1, Target2 – L2, Target3- L3
Scenario 3
Open price is between L3 and L4
For Long
When price moves above L3, buy. Stoploss when price moves below L4. Target1 – H1, Target2 – H2, Target3 – H3
For Short Sell
When the price goes below L4, sell. Stoploss when price moves above L3. Target – 0.5% to 1%
Scenario 4
Open price is above H4
For Long
Buying is not suggested in such scenarios.
For Short Sell
When the price goes below H3, sell. Stoploss when price moves above H4. Target1 – L1, Target2 – L2, Target3- L3
Scenario 5
Open price is below L4
For Long
When the price goes above L3. Stoploss when price moves below L3. Target1 – H1, Target2 – H2, Target3 – H3
For Short Sell
Short Selling is not suggested in such scenarios