The Central Pivot Range (CPR), as you may know, is one of the most popular trading indicators out there. Anyone can simply add some CPR levels to the chart by choosing one of the popular CPR indicators on their trading terminal.
Of course, you can plot CPR levels on the chart with ease before your trading session, and it is highly helpful for all types of traders: intraday, swing, positional, short-term, and more.
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However, many traders are not aware of how the CPR is basically calculated. It is always better to know the basics of this primary and most important trading indicator. Let us explore the CPR formula here.
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The CPR Formula
As you know, CPR has three components: Pivot, Bottom Central Pivot (BC), and Top Central Pivot (TC). Below come the simple formulas to calculate the three CPR levels.
| Pivot = (High + Low + Close) ÷ 3 > The Sum of the Previous Day’s High, Low, and Close Levels Divided by Three. Bottom CPR = (High + Low) ÷ 2 > The Sum of the Previous Days’ High and Low Levels Divided by Two. Top CPR = (Pivot – BC) + Pivot > The Pivot Value Added to the Subtracted Value of Pivot and Bottom CPR. |
The Nifty 50 Example
The Values
Previous High: 19345.10
Previous Low: 19234.40
The Close Value: 19322.55
The Solution
| The CPR: (19345.10 + 19234.40 + 19322.55) ÷ 3 = 19,300.68 The Bottom CPR: (19345.10 + 19234.40) ÷ 2 = 19,289.75 The Top CPR: (19,300.68 – 19,289.75) + 19,300.68 = 19,311.61 |
Vahid Vee is, by profession, a blogger and search marketer, and by passion, a stock investor and trader who loves to write on various ready-to-go platforms and systems that help people make good decisions in trading and investing. As an investor and trader on F&O, swing, and long-term positions in the Indian stock market, he is excited to share with you his experiences over at TradeTranz here. #Contact him @ vahidvee@tradetranz.in – LinkedIn – Quora – Reddit