Using Camarilla Levels to Identify Key Support & Resistance
Camarilla levels are a classic intraday tool for traders. They generate daily support and resistance zones from the previous session’s range. This helps identify where price may pause, reverse, or break. Volume price analysis (VPA) confirms conviction at these levels—high volume shows real interest.
An extract of our day trading the US futures session with a look at the fundamental releases that are becoming increasingly dramatic as coronavirus continues to dominate with particular focus on the YM emini, which is the futures contract for the Dow Jones using charts from the Ninjatrader platform. Analysis of the chart was done using the accumulation and distribution indicator along with Camarilla levels to identify key levels of support and resistance.
How Camarilla Levels Work for Support & Resistance
Standard Camarilla calculates 8 levels (R1-R4 resistance, S1-S4 support):
- Inner Levels (R2/S2): Core range—price often consolidates here.
- Outer Levels (R3/R4, S3/S4): Breakout or reversal zones—high activity expected.
Price respecting levels = strong S/R. Breaks on volume = momentum.
Quantum Camarilla: Enhanced for Precision
Quantum Trading extended Camarilla to six levels each side (R1-R6, S1-S6). This adds depth:
- R2/S2: Tight range/consolidation.
- R3/R4 and S3/S4: Primary breakout/reversal.
- R5/R6 and S5/S6: Extreme zones—strong rejection or acceleration.
Quantum adds signals—alerts on touches, breaks, or retests. This saves time.
VPA Confirmation at Camarilla Levels
VPA elevates Camarilla:
- High volume bounce at level = strong support/resistance.
- Low volume rejection = potential reversal.
- High volume break = momentum continuation.
Quantum Trend Monitor aligns direction. This avoids counter-trend traps.
Practical Trading Tips
- Rangebound: Fade bounces at R2/S2 on volume rejection.
- Breakout: High volume through R3/R4 or S3/S4—enter momentum.
- Reversal: Rejection at R5/R6 or S5/S6 on volume—counter-trend opportunity.
Example: EUR/USD tests S4. High volume hold—long entry. Break higher on volume—trail.
Quantum on NinjaTrader or MT5 makes levels visual. Alerts notify instantly.
Camarilla levels identify key support & resistance effectively. Quantum’s 6-level version with signals adds precision. VPA confirms conviction. Trade levels with discipline.
Comparing Camarilla Levels to Standard Pivot Points
Pivot points and Camarilla levels are both classic intraday tools. They generate daily support and resistance from the previous session’s price data. Traders use them for entries, stops, and targets. But they differ in calculation, level distribution, and focus. Volume price analysis (VPA) enhances both—high volume at levels shows conviction. Quantum’s extended Camarilla adds modern precision.
Standard Pivot Points (Floor Pivots)
The traditional method calculates a central pivot and symmetric levels:
- Formula:
- Pivot Point (PP) = (High + Low + Close) / 3
- R1 = (2 × PP) – Low
- S1 = (2 × PP) – High
- R2/R3 and S2/S3 extend further.
This creates 7 levels total (PP + 3 each side). Symmetric and evenly spaced.
Strengths:
- Simple and widely used—many traders watch them.
- Good for trending markets—outer levels for extensions.
- Clear central pivot for range bias.
Best For: Swing traders or longer intraday holds. VPA confirmation on breaks.
Camarilla Levels
Camarilla uses a different formula, emphasizing inner range:
- Levels clustered closer to price.
- Standard: 8 levels (R1-R4, S1-S4).
- Inner (R2/S2) tight—core consolidation.
- Outer (R3/R4, S3/S4) for breakouts/reversals.
Quantum extends to 6 levels each side (R1-R6, S1-S6) with alerts.
Strengths:
- Tighter inner levels for ranging markets.
- Outer extremes for strong reversals or acceleration.
- Signals (Quantum version) notify touches/breaks.
Best For: Intraday scalping or volatile sessions. VPA at extremes spots traps or conviction.
Key Differences and When to Use Each
- Distribution: Pivots symmetric—wide spacing. Camarilla clustered inner—finer granularity.
- Market Fit: Pivots for trends. Camarilla for ranges or volatility.
- Quantum Advantage: Extended levels + signals make Camarilla more actionable.
Combine both for confluence. High volume at shared levels = stronger S/R.
VPA Confirmation for Both
VPA elevates either:
- High volume bounce = strong level.
- Low volume rejection = reversal.
- High volume break = momentum.
Quantum VPOC adds volume-weighted context.
Pivots and Camarilla complement each other. Pivots for broad structure. Camarilla (especially Quantum) for intraday precision. VPA with Quantum tools turns levels into disciplined trades.
Choose based on market conditions. Quantum Camarilla leads for modern volatility.
By Anna Coulling