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trading WITHOUT
the Camarilla Equation? You might as well be gambling!

You
have probably heard about the 'Camarilla Equation' by now, and
how Day Trading is made easier by it  allegedly a secret day trading
formula that will help your day trading reach new heights of accomplishment,
with the bare minimum of risk. Or so the story goes. But what about
the reality? We have investigated the Camarilla Equation thoroughly,
and can now report on the truth behind this amazing phenomenon.The
first thing you should realise is that there are a number of different
versions out there all confusingly called 'Camarilla'. Most are attempts
by amateur traders on notice boards and such like to 'crack the secret'
of the Equation, which are obviously worth what you pay for them (nothing!)
and there are a few commercial websites offering a 'Camarilla Equation'
all appearing to be based on different ideas and mathematics. The
version we have had success with is the 'SureFireThing Camarilla Equation',
discovered in 1989 by a semilegendary bond trader called Nick Scott
which is the only offering that has convinced us that the Equation
works, and the only site that can offer any kind of explanation behind
the phenomenon.
Origins
of the Camarilla Equation
camarilla.
cam·a·ril·la. A group of confidential, often scheming advisers;
a cabal.[Spanish, diminutive of cámara, room, from Late Latin camera.
See chamber.]
Discovered
while day trading in 1989 by Nick Scott, a successful bond trader in the financial markets, the
SureFireThing 'Camarilla' equation uses a truism of nature to define
market action  namely that most time series have a tendency
to revert to the mean. In other words, when markets have a wide
spread between the high and low the day before, they tend to reverse
and retreat back towards the previous day's close. The SureFireThing
Camarilla Equation uses some complicated mathematics to pluck 8
levels out of thin air, using nothing more than yesterday's open,
high, low and close. These levels are, frankly, astounding in their
accuracy as regards day trading, even to seasoned traders, who know
all about support and resistance, pivot points and so on. SureFireThing.com
supply their online SFT Camarilla Equation calculator for day trading
at probably the lowest cost available anywhere. There are a number
of other commercial sites purporting to supply a 'Camarilla' equation,
but we cannot vouch for any of them, as none would give us a free
trial! There are also various free websites offering 'Camarilla'
Equation calculations, usually based on fairly standard pivot points
and so on. None of these produces the same results as the SureFireThing
version, and trading with them must therefore be regarded as 'pot
luck'.
SFT
Camarilla Equation Levels
The
SFT Camarilla Equation produces 8 levels from yesterday's open,
high, low and close. These levels are split into two groups, numbered
1 to 4. The pattern formed by the 8 levels is broadly symmetrical,
and the most important levels are the 'L3', 'L4' and 'H3', 'H4'
levels. While day trading, traders look for the market to reverse
if it hits an 'L3' or 'H3' level. They would then open a position
AGAINST the trend, using a stop loss somewhere before the associated
'L4' or 'H4' level. The SFT theory suggests setting stoplosses that
appear to you the trader to be prudent, and to not even open the
trade until it has penetrated the level in the 'right' direction,
i.e. demonstrated that it has found resistance (or support). In
the case of the higher H3 level, this would mean that price had
already reversed and pushed back down thru the level, heading south.
The
second way to try day trading with the Camarilla Equation is to
regard the 'H4' and 'L4' levels as 'breakout' levels  in other
words to go WITH the trend if prices push thru either the H4 or
L4 level. This essentially covers all the bases  Day Trading within
the H3 and L3 levels enables you to capture all the wrinkles that
intraday market movement throws up, and the H4  L4 breakout plays
allow the less experienced trader to capitalise on relatively low
risk sharp powerful movements. Here's what it looks like in action:
SureFireThing
Camarilla Equation Day Trading Versions
Interestingly
enough, SureFireThing.com supply 2 versions of the calculator for
day trading enthusiasts, their 'original' version, to be used by
experienced day traders who enjoy the cut and thrust of the day's
action, and a '{b}' version, for the less experienced day traders.
This {b} version exploits the day trading breakout potential of
the SFT Camarilla Equation, and furthermore, provides suggested
stoplosses and profit targets that allow a beginner to rapidly get
up to speed (and start making money, hopefully!) until such time
as they are confident of trying the 'original' equation.
More
information about the SFT Camarilla Equation
If
you want to jump right in and try it, the best place to look is
Day Trading Site , as
they have a professional, fast website, and reasonable charges.
I can make no comments about any other websites offering 'camarilla
equations' as I'm STILL waiting for a free trial. The supposed 'camarilla'
formulas to be found on various trading boards etc have turned out
to be rather unusable attempts to capture the maths in a simplistic
fashion, so those aren't recommended either. If you want more information
about Day Trading in general, we would recommend www.traders101.com
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Camarilla Equation.com 1996  2014
