Using Camarilla to identify key levels in multiple time frames

Using Camarilla to identify key levels in multiple time frames

Support and resistance become even more important in multiple time frames, particularly when a trader’s focus chart approaches a significant point on a higher or slower time frame. In this video, we explain how to identify such levels using the Camarilla indicator for MT5.

00:00

Introduction to Forex webinar and market overview

00:00

The webinar begins with a welcome and an overview of the forex market and related markets, emphasizing the importance of considering both technical charts and fundamental factors, especially during the ongoing health crisis. The presenter highlights how risk and market sentiment are influenced by current events. A disclaimer about the risks of trading is given, cautioning viewers to only trade with money they can afford to lose. The hosts introduce their approach, which involves analyzing the market using volume analysis combined with price action to gain deeper insights.

01:36

Oil market crash and its impact on currencies

01:36

The discussion begins by emphasizing the importance of anticipating market movements, incorporating fundamental news and related markets. A notable event highlighted is the unprecedented negative pricing in the oil market’s May futures contract, caused by traders avoiding physical delivery due to lack of storage.

This had some impact on petrodollars and a minor reaction in the Canadian dollar. Attention then shifts to the New Zealand dollar against the Canadian dollar, which showed a strong buy signal since mid-Asian sessions, driven by positive news of Australia and New Zealand emerging from the health crisis and starting to reopen their economies.

03:14

The speaker demonstrates how to analyze this market movement using the CSI and other Forex Pacific indicators, focusing on the hourly chart. These indicators help understand the past, present, and anticipated future trends in currency markets, reinforcing the earlier analysis of the New Zealand dollar’s strength amid economic reopening signals.

03:44

Currency movements and market extremes analysis

03:44

The speaker analyzes current market conditions, noting instability due to falling oil prices. While lower oil prices can be positive for equities, they also indicate weak demand and a sluggish economy. The Japanese yen has been rising, and markets like the Nikkei and S&P show volatility. Overnight movements in currencies such as the Kiwi reflect extremes, suggesting potential trend reversals.

04:47

Focusing on currency extremes, the speaker highlights the Aussie and Kiwi currencies at lows, indicating strong moves and possible reversals. Attention is given to the London open and how crossover trading sessions bring new participants that can influence price direction. A notable rise occurred against the Canadian dollar due to oil-related weakness. The speaker explains timing discrepancies in MT4 platform timestamps, emphasizing the importance of understanding these quirks when analyzing market moves.

06:25

Mean reversion and trading session crossovers

06:25

The speaker explains how currency markets, like the New Zealand dollar, often exhibit mean reversion where prices move down and then back up, presenting trading opportunities. Traders aim to capture moves from extreme positions, though timing within the trading day affects what part of the move can be caught. The New Zealand-Canadian dollar pair is used as an example, showing strong moves with periods of consolidation and continuation, especially after the London session. The speaker highlights the importance of analyzing faster timeframes to understand price action, noting that traders may only capture small portions of larger moves, which can sometimes be slow and lack momentum. Indicators developed to help identify these trading opportunities on platforms like MT5 are mentioned.

08:43

Using Renko charts for price action analysis

08:43

The speaker explains the use of non-time-based charts like Renko for price analysis, highlighting how Renko bricks are based on pip values rather than time intervals. This approach better captures momentum or consolidation periods that time-based charts may miss. The brick size is dynamically calculated by an indicator, often showing values like 1.56 pips, and multiple versions with different brick sizes can be used for comparison. The example given is the New Zealand dollar pair, currently showing sideways movement and consolidation without momentum. Support and resistance levels become crucial during such periods to anticipate potential breakouts or declines.

12:20

Support and resistance methods explained

12:20

The speaker explains the use of support and resistance levels in trading, emphasizing three types: price-based, volume-based, and a proprietary indicator called volume point of control. They introduce the concept of ‘camera levels,’ which are price-based and help traders identify potential stopping points for price movements, especially during less smooth market conditions, aiding in risk and reward assessment.

13:25

Further details are given about the support and resistance levels, highlighting their hierarchical importance similar to Fibonacci levels. The Camarillo levels are calculated using a specific formula and vary across different time frames, with values recalculated daily. The speaker stresses the need to understand these varying levels on different charts, such as three-minute versus hourly, to better anticipate price targets and manage trade risk and reward.

15:10

Camarillo levels and multi-timeframe analysis

15:10

The speaker discusses the importance of analyzing different timeframes when trading, particularly emphasizing the value of hourly charts that remain relevant throughout the week. They explain that daily levels change every 24 hours, but higher timeframe levels stay consistent, helping traders identify significant support and resistance points where price may stop or reverse. This approach is useful for traders who focus on specific currency pairs, allowing them to understand key levels that persist over time.

16:17

Traders are encouraged to familiarize themselves with their chosen currency pairs and key support and resistance levels to enhance their trading decisions. The speaker highlights the method of using slower timeframes to identify significant levels and then confirming potential price action through volume price analysis (VPA) on shorter timeframes. Volume is emphasized as a crucial factor that must support any genuine price movement, reflecting market participation and activity.

17:19

The explanation covers the three ways support and resistance are used in their trading program, which is available to students and indicator users. The speaker notes that while their methodology is based on volume price analysis (VPA), traders with various backgrounds, including Elliott Wave and Fibonacci, can integrate these principles with their existing strategies. The indicators developed serve as foundational tools that can be combined with prior knowledge and experience for flexible application.

18:26

The speaker shares a current example from their Ninja Trader platform, analyzing the Euro-Aussie currency pair. They observe a recent price pullback following a strong downward move, influenced by session crossovers such as the London session. This real-time example illustrates how session overlaps can affect price action and how VPA can be applied to assess trade setups.

19:01

Real-time market indicators and Q&A session

19:01

The speaker analyzes various currency pairs and market indices in real time. They observe the Australian dollar (Aussie) is showing a buy signal, the euro appears promising, and the New Zealand yen is trending down but may rise if market sentiment changes. They also check the Nasdaq and note it is diverging from the S&P 500 and Dow Jones, which typically move together. The speaker plans to examine the euro and Australian dollar in more detail and invites viewers to submit questions for live or typed responses.

By Anna Coulling – creator of volume price analysis