What are CPR?

CPR stands for Central Pivot Range.

CPR is a Unique Candlestick intraday tool that uses previous day’s data points to calculate the current day’s reference points. Central Pivot Range (CPR) is an intraday tool popularly used by both short term and intraday traders to identify support and resistance levels in any instrument. This tools plots 3 lines on the chart: CPR line, BC (Bottom Central) line, and TC (Top Central) line.

Calculation of CPR.

CPR is calculated based on previous day’s candle on Daily TF. The calculation of CPR is very simple:

• CPR = (High + Low + Close)/3

• Bottom Central line = (High + Low)/2

• Top Central line= (CPR - BC) + CPR

The calculation of CPR lines is such that Top central line is equidistant line from CPR. Let us look at an example: The OHLC points of the previous day were 400, 460, 380, and 450 respectively. This is a green candle day. Then, CPR would be 430. BC would be 420. TC would be 440. But let’s say OHLC were 400, 460, 340, and 350. Then, CPR would be 383. BC would be 400. TC would be 366.

Observe that when the previous day is a green candle day, BC line is below the CPR line and TC is above the CPR line. When the previous day is a red candle day, BC line is above the CPR line and TC is below the CPR line.

How to use CPR lines

CPR is simple to use for intraday trading. They act as great reference point during market hours. Here are some of the use cases of CPR:

• When price is away and above the CPR lines, it is a strong uptrend. 

• When price is away and below the CPR lines, it is a strong downtrend. 

• Current day’s lines above previous day’s lines is considered bullish.

• Similarly, Current day’s lines below previous day’s is considered bearish.

• If the Current day’s lines are at the same level of previous day’s lines, the trend can be expected to be sideways.

I have further discussed this concept in my video so make sure you check it out.