What is the CPR Formula in Trading?

To determine the CPR, the trader would have to chart three key price levels using a set of formulae. It is based on the lowest, highest, and closing prices of a stock on the previous trading day. By analysing these levels from the previous day, the trader can predict the potential price movements of the stock for the next trading session.

Here are the formulae for calculating the three levels of CPR, which are as follows:

Pivot Point = (High + Low + Close) / 3
Top Central Pivot Point (TC) = (Pivot – BC) + Pivot
Bottom Central Pivot Point (BC) = (High + Low) / 2