In the context of CPR (Central Pivot Range) in trading, TC and BC stand for Top Central Pivot and Bottom Central Pivot, respectively.
Understanding the Central Pivot Range (CPR)
The Central Pivot Range (CPR) is a popular indicator used in technical analysis to identify potential support and resistance levels. It consists of three key levels:
- Pivot Point (PP): The main level, calculated as (High + Low + Close) / 3
- Top Central Pivot (TC): Calculated as (Pivot - Bottom) + Pivot
- Bottom Central Pivot (BC): Calculated as (High + Low) / 2
Significance of TC and BC
- Potential Support and Resistance: TC and BC act as potential areas of support and resistance. Price often reacts to these levels, either bouncing off them or breaking through.
- Range Identification: The distance between TC and BC indicates the potential trading range for the day. A wider range suggests higher volatility.
- Trend Identification: The relationship between the CPR values and the previous day's CPR values can provide clues about the current trend. For example, if the current day's CPR is above the previous day's, it may signal an upward trend.
Calculation Summary
Here's a concise summary of the calculations involved:
| Level | Calculation |
|---|---|
| Pivot Point (PP) | (High + Low + Close) / 3 |
| Top Central Pivot (TC) | (Pivot - Bottom) + Pivot or Pivot + (Pivot - BC) |
| Bottom Central Pivot (BC) | (High + Low) / 2 |
Where High, Low, and Close refer to the previous day's values.
In summary, TC (Top Central Pivot) and BC (Bottom Central Pivot) are crucial components of the CPR indicator, providing valuable insights into potential support and resistance levels, trading range, and trend direction.
