A breakout above a Virgin TC line can signal the start of a strong bullish trend, while a break below the Virgin BC line may indicate a bearish move. These initial reactions offer traders potential entry points with strong momentum possibilities. A virgin CPR occurs when the stock price does not cross the CPR lines. It is commonly observed that if the price of a stock fails to touch the range the previous day, the stock’s price has a 40% chance of failing to break the CPR range.

The current market price is higher than the TC, and you are looking for an opportunity to set up a buy trade. As you can see, I’ve dragged the order window up to 45.40, and I can fire an order within the charts without going back to the marketwatch and getting distracted with other quotes. The current market price, i.e. 42.45, is seen with the red background. When the CPR has a medium range (neither too narrow nor too wide), it suggests a neutral stance where the security may or may not exhibit a clear trend. It indicates that the market is in a consolidation phase or lacks a strong directional bias. If you make trades based on CPR breakout with volume confirmation, then the success ratio can be as high as 70%.

Trading Strategies using Stochastics Technical Indicator

• As a general rule, you can use one of the CPR levels as a stop loss.
• Central Pivot Range is a common tool used by traders for analyzing stocks.
• One such technique is reading different charts and deciphering them to speculate market fluctuations and take profitable positions.
• In a candlestick pattern, the bigger breakout candles provide additional assurance for the continuing trend.
• Central Pivot Range (CPR) is a well-known intraday indicator used by technical analysts daily.

In other words, the price in the previous session has not tested or breached the CPR levels. Central pivot range (CPR) refers to a tool employed in financial trading that utilizes the prior day’s high, low, and close prices to determine possible market support and resistance levels. During times when the stock’s price moves over the top central level, it is an indication of an uptrend; an ideal time for traders to to consider buy positions. In this case, the CPR acts as a support level and helps traders ride the momentum and potentially profit from it. When a particular stock’s price does not touch any of its CPR levels all through the trading session, that is when a virgin CPR occurs.

What Is The Use Or Benefit Of A Virgin CPR?

There are several pivot points used by traders to interpret price movements, but the most common one is the Central Pivot Range or CPR indicator. CPR indicators can be used to identify the bullish and bearish trends of the market and take suitable trading positions. When the stock is at a higher level than the TC it is a strong indicator of the bullish trend. On the other hand, if the stock price is continuously lower than the BC line, it is a strong indicator of the bearish trend. Another important factor to consider while trading is the use of stop loss.

Readers are advised to conduct their own due diligence and seek independent financial advice before making any investment decisions. Similarly, the trader must pursue selling opportunities when the current market price falls below the BC. Using this AFL code, you can view the CPR levels of all the stocks from your watchlist, and also you can scan for narrow range stocks. Using this sheet, you can calculate CPR as well as support/resistance levels for any symbol of your choice. The width of the CPR lines very accurately gives an idea of the expected price movement. If CPR width is narrow, that is the distance between TC and BC lines of CPR is very low, then it indicates a trending market.

Elearnmarkets (ELM) is a complete financial market portal where the market experts have taken the onus to spread financial education. ELM constantly experiments with new education methodologies and technologies to make financial education effective, affordable and accessible to all. We hope you found this blog informative and use it to its maximum potential in the practical world. Also, show some love by sharing this blog with your family and friends and helping us in our mission of spreading financial literacy. You buy when the stock is at BC, with TC as a target and sell (fresh short) when the stock is at the TC with an expectation that the price declines to BC soon.

The three levels of the CPR indicator and the formula for calculating them are listed below. Central Pivot Range (CPR) is a well-known intraday indicator used by technical analysts daily. If the CPR lines form higher high every day and look like an upward ladder, then it indicates strong bullishness. Of course, I know many traders who prefer not to trade the range and prefer to trade only the pullbacks. While this is a great way to validate the candlestick pattern, there is one problem with this. The identification process does not consider the ‘prior trend’, rule that is critical to candlestick pattern.

For a long time, pivot points have been an effective trading indicator; however, one type of pivot point currently popular among traders is the central pivot range or CPR indicator. Thus, traders can use these levels as potential support and resistance areas during the trading day, and they may consider buying or selling around these levels based on their trading strategy and analysis. Apart from fundamental analysis of the company’s stock, the price and volume movements of the stock are affected by various factors like the demand-supply of the shares or the current market sentiment, etc. Such technical analysis of the stocks can be done using various tools and techniques. If the current market price of the stock moves above the top central level, it indicates an uptrend, which is an ideal time for traders to place buy orders. By understanding the CPR components, calculations, and applications, traders can better analyze market trends, identify support and resistance levels, and potentially find profitable trading opportunities.

• This CPR calculator tool helps you to automate the CPR calculation process and you can get accurate data and the key levels of particular stocks.
• These are not exchange traded products and all disputes with respect to the distribution activity, would not have access to exchange investor redressal forum or Arbitration mechanism.
• Virgin CPR indicator can indicate a powerful resistance or support level.

What is a Margin Trading Facility? Advantages & Risks

This wide-range CPR indicates the possibility of a sideways or range-bound day, where the price is expected to consolidate or experience a cooling-off period after the previous day’s trend. In the CPR formula, the High, Low, and Close refer to the previous day’s highest, lowest, and closing price of the stock respectively. The Web Site uses an order form for customers to request information, products and services. The visitor’s contact information is also used to get in touch with the visitor when necessary. Financial information that is central pivot range formula collected is used to check the users’ qualifications and bill the user for products and services.

Range Trading

The candlestick pattern identification is a great way to validate the patterns. If the stock is showing a bearish view that is when the market price of the stock remains lower (breakdown) than the BC level in CPR. When the price movements do not touch any of the CPR levels in a particular schedule, then that particular CPR is the virgin CPR. The three levels of CPR indicator and the formula to calculate them are mentioned hereunder. When the CPR makes lower lows every day, i.e., one CPR below the other, that indicates that the stock or security is in a downtrend.

Moreover, when the price fluctuates within the CPR range, traders may watch for a breakout with an increase in volume above the top central level. However, if the CPR has a broader range, the best strategy may be to buy at the upper central pivot point. If you are new to trading and technical analysis, you might have heard about CPR but lack clarity on what it is. Central Pivot Range (CPR) is one of the powerful tools and key indicators in technical analysis that helps in identifying potential resistance and support levels in a particular trading session.

It is observed that when a stock is not able to touch its previous day’s range, there is a 40% possibility that the stock would not touch the CPR levels for the whole day. Virgin CPR indicator can indicate a powerful resistance or support level. When you use the CPR indicator in a chart, you will notice that the TC will represent the highest price level, BC will represent the lowest level, and the pivot will represent the centre. These levels are derived from the previous day’s price data, providing a framework for predicting potential price movements for the current trading day. CPR is usually used in intraday trading and provides the highest accuracy.

A narrow CPR width is when the distance between the TC and BC is relatively small. When the distance between TC and BC is quite huge, it is a wide CPR width and indicates a sideways market. A medium CPR width is when the distance between TC and BC is between the narrow and wide margins of CPR. When the current price is lower than the Bottom Central Pivot Point (BC), it indicates a seller’s market.

Also note this point, if you are a day trader and you are using 5 mins chart, you need to enter 5 minutes candles high, low and close. Nowadays, many traders are using the CPR indicator to do day trading and swing trading. Mainly, CPR indicators work awesomely in the Nifty and Banknifty charts. To use this indicator, first you need to learn about this indicator. Also, you could use a CPR calculator or Central Pivot Range Calculator to calculate the CPR, pivot, support and resistance level of a particular stock.

In Simple Terms, the TC is the Pivot Point adjusted by the difference between it and the bottom central pivot point. It helps identify the potential upper boundary of price movement. The basis for calculating CPR is the previous day’s or previous session’s stock levels (highest, lowest and closing stock level). The CPR Indicator is one of the well-known indicator used by many traders in their day to day trading for Intraday, Swing Trades and even for long term investment in stocks.

But also keep in mind, that CPR is just one type of technical indicator used in trading. But it is a difficult process to calculate the CPR levels for many stocks. So, I created this CPR calculator and I hope it helps you to calculate CPR levels. If the stock is showing a bullish view that is when the market price of the stock move higher (breakout) than the TC level in CPR.

When used judiciously, it can help you decide your stop loss level. Virgin CPR can be used as very strong support or resistance level that we’ll learn further in this article. Candlestick pattern is an interesting addition in the recent update. The candlestick pattern study helps you identify the candlestick formation from the charts.