The CPR (Central Pivot Range) indicator is a technical analysis tool that is used to identify potential support and resistance levels in the market. It is based on the concept of pivot points, which are calculated using the previous day's high, low, and close prices.


The CPR indicator consists of three levels: the central pivot range, the upper pivot range, and the lower pivot range. The central pivot range is the midpoint between the high and low pivot points, while the upper and lower pivot ranges are the levels above and below the central pivot range.


Traders use the CPR indicator to identify potential support and resistance levels based on the price action around the pivot ranges. If the price is trading above the central pivot range, this may be an indication of bullish momentum, and the upper pivot range may serve as a potential resistance level. Conversely, if the price is trading below the central pivot range, this may be an indication of bearish momentum, and the lower pivot range may serve as a potential support level.


One of the advantages of the CPR indicator is that it provides traders with a clear and easy-to-use framework for identifying potential support and resistance levels. By focusing on the pivot ranges, traders can quickly identify important price levels and make more informed trading decisions.


However, like any trading indicator, the CPR indicator is not foolproof and should be used in conjunction with other technical and fundamental analysis tools. Traders should also be aware of the risks involved in trading and should always use appropriate risk management techniques to minimize their exposure to potential losses.