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CPR Trading Technique

In financial markets price changes constantly for many different reasons and hence financial markets is unpredictable. Both traders and investors are always busy in seeking some kind of tool or technique which would guide them during price fluctuations and help them in taking wise decision. Technical analysis provides several indicators which help to interpret the trends in the market. Central Pivot Range which popularly known as CPR provides a valuable framework for understanding potential price movements. 

CPR stands for Central Pivot Range. Traders and investors can use it for intraday as well as swing or positional trading. It is a technical indicator based on the trading activity over the previous day. In CPR trading, three important levels are derived from the high, low and closing price of the previous period (say, day or week or month). 

The traditional pivot points generally have one central pivot line surrounded by supports (S1, S2, S3....) and resistances (R1, R2, R3.....). In Central Pivot Range (CPR) there are three levels. 

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  1. Central Pivot Point (PP)

  2. Bottom Central Pivot Point (BC)

  3. Top Central Pivot Point (TC)


Usual support and resistance levels are above and below this CPR.
As Central Pivot Range is based on past data, it does not change and fix in all time frames. For different traders, CPR can be calculated daily, weekly, monthly or yearly depending on the trading style of the trader.

  • Investors ................... uses Yearly levels

  • Positional traders ...... uses Monthly levels

  • Swing Traders ........... uses Weekly levels 

  • Daily Traders ............. uses Daily levels 

CPR levels are calculated as under : 

  1. Central Pivot Point (PP)         =    (High + Low + Close) / 3

  2. Bottom Central Pivot Point (BC) = (High + Low) / 2

  3. Top Central Pivot Point (TC)  =   (Pivot - BC) + Pivot

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Resistances like R1, R2, R3,....... and supports like S1, S2, S3,.......etc are calculated as usual using formulas of Pivot levels.​

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  1. R1 = (PP * 2) - Low

  2. R2 = PP + (High - Low)

  3. R3 = High + 2 * (PP - Low)

  4. S1 = (PP * 2) - HIgh

  5. S2 = PP - (High - Low)

  6. S3 = Low - 2 * (High - PP)

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