Which goes to show that SR lines are, pretty well, where the observer wants to see them. I've seen charts with many more lines on it than you have shown. The main thing to remember is that they are drawn where you believe other peoples stops are likely to be and, if you think about that, with the thousands of traders who have stops of various size orders at various price levels, that is quite a problem to figure out. Anyone of your lines is likely to be a significant trading point and yours are as good as anyone else's. Besides, the more there are, the more chance you have of one of them being right.
Which surely means that if you only mark the obvious ones, they are GREAT trading points.
MainCycleV
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These SR lines donot apply in wave 3, since price will usually break the lines in Wave 3?
Which, partly, answers your question. If your price is rising, the first line, beng the first to go, is crossed with difficulty and so on, each line triggering a series of stops, with reducing difficulty until there are no more buyers, or no more sellers. If crossing the top line takes you into new high ground and does not return, then the sellers have given up.
That theory means that you should draw in all of the points that you see because you need them in your assessment as to whether the market is getting tired and, if it is, how many more resistance lines lie ahead of it.
Now, if while all this is going on, some really big players decide to place orders higher up
because they think that the buyers are weakening, how are we going to know that? Volume won't tell us because it has not happened, yet.
This is one of the reasons that I take these theories with a large pinch of salt.
Perhaps, the highest line will be the obvious one to these, so far, uncommitted traders, because there has been so much buyer/seller activity lower down, that they will be exhausted when they reach the final line.
Split
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I have taken the liberty of adding some red circles to your chart (not very strong, sorry) which shows that the trader should not jump the gun, and wait for several bars to establish a pattern there. IMO, the 3rd circle shows a strong attempt to pierce the final line, which was stopped and reversed in the same bar. The subsequent rise and failure to go higher probably would have indicated a change of trend, to me which, in the event does not seem to have happened.
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c_c405
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Personally I would not
I would not call any of these support or resistance, but that's mainly because I would look for the larger swing opportunities.
The lowest one on your pic is the closest I would call support and resistance is no where near anything you have lined at the top. Resistance on this pair would be the 94 zone (give or take 100 pips)
Only your lowest one there would hold some sort of support but as you can see the middle zone had resistance broken and then dropped shortly after and support is vice/versa
So yes you can have to many S/R lines and the amount you have on this chart is not enough for me to call S/R simply because the price has moved over and under those lines numerous times
I would not call any of these support or resistance, but that's mainly because I would look for the larger swing opportunities.
The lowest one on your pic is the closest I would call support and resistance is no where near anything you have lined at the top. Resistance on this pair would be the 94 zone (give or take 100 pips)
Only your lowest one there would hold some sort of support but as you can see the middle zone had resistance broken and then dropped shortly after and support is vice/versa
So yes you can have to many S/R lines and the amount you have on this chart is not enough for me to call S/R simply because the price has moved over and under those lines numerous times
I sometimes wonder if I'm drawing too many S&R zones on my 4hr charts.
Usually, it's plain and simple to see but every now and then I get a cluster of 3 zones all within 100 pips - this seems too many.
Any thoughts?
eg 0.8968 on this chart
