Horizontal Lines

[apmf]

Drawing horizontal lines(S&R) on chart is very quite simple but I have seen people drawing it in different ways.

In general I draw them on areas/zones where prices has pivoted or flipped (SbR/RbS) most of the times starting from Higher Tf(monthly) to 30 minute TF. I use 30 and 1hr chart for entry.

Sometimes these areas/zone holds sometimes it doesnot repect at all (usually during a major news/event).

My question is, do you disregard/delete those lines where prices have not pivoted previously and give more consideration to the recent levels in each particular Tf's for drawing a Horizontal Line??
Or how do you draw your HL's? I mean do you draw it from the most obvious areas or any areas where prices has stopped and consolidated for sometime and continued?

Thanks!

 

[Hercules88]

Drawing trendlines is more of an art than a science, so each person draws trendlines differently. I draw HL's many ways. However, the strength I believe these HLs hold varies depending on their prior circumstances. Weak support/resistance lines still deserve to be drawn in, IMO, because they can be used for intra day bounces and scalps. Pivotal Support/Resistance lines obviously play a stronger role in my trading.

Trend lines are only one piece of the puzzle for me, albeit an important one.

 

[tenbobtrader]

Drawing horizontal lines(S&R) on chart is very quite simple but I have seen people drawing it in different ways.

In general I draw them on areas/zones where prices has pivoted or flipped (SbR/RbS) most of the times starting from Higher Tf(monthly) to 30 minute TF. I use 30 and 1hr chart for entry.

Sometimes these areas/zone holds sometimes it doesnot repect at all (usually during a major news/event).

My question is, do you disregard/delete those lines where prices have not pivoted previously and give more consideration to the recent levels in each particular Tf's for drawing a Horizontal Line??
Or how do you draw your HL's? I mean do you draw it from the most obvious areas or any areas where prices has stopped and consolidated for sometime and continued?

Thanks!

Hi apmf

the market facilitates trade :idea:

there are no magic bullets

there is no absolute right or wrong

http://www.trade2win.com/boards/foyer/51268-there-no-such-thing-bad-luck-4.html#post634394 .........(SEMM rep was an old nick of mine


this guys articles helped me regards S & R

T2W Day Trading & Forex Community

"Be formless... shapeless, like water. If you put water into a cup, it becomes the cup. You put water into a bottle; it becomes the bottle. You put it into a teapot; it becomes the teapot. Water can flow, or it can crash. Be water, my friend..."
"All kind of knowledge, eventually becomes self knowledge"
"Use only that which works, and take it from any place you can find it."
"Do not deny the classical approach, simply as a reaction, or you will have created another pattern and trapped yourself there."
"A quick temper will make a fool of you soon enough."
"Always be yourself, express yourself, have faith in yourself, do not go out and look for a successful personality and duplicate it."
"It's not the daily increase but daily decrease. Hack away at the unessential."

by Bruce Lee

good luck with YOUR method build :clover:


Andy

I prefer areas / zones to 1 horizontal Line myself - observe at zone

 

[tenbobtrader]

I believe that the public wants to be lead, to be instructed, to be told what to do. They want reassurance.They will always move on masse, a mob, a herd, a group, because people want the safety of human company. They are afraid to stand alone because the pressure is to be safely included within the herd, not to be the lone calf standing on the desolate, dangerous wolf-patrolled prairie of contrary opinion

Jesse Livermore

 

[tenbobtrader]

The aha! process lies at the heart of price change. For instance, consider the series: OTTFFSSE. What is the next letter? This puzzle creates tension - until you see the first letters of the ordinal numbers - one, two. Aha! you say. A lot happens during an aha. The puzzle dies and the tension dissipates. A societal aha! drives price. Read the newspapers and the news magazines during a major move. At first, no one gets why the move is happening. There's a lot of confusion. Part of the move's way up, some people get it. At the end, everybody gets it. The tension is resolved and the move ends.

Ed Seykota

 

[tomorton]

Hi apmf - A counter-intuitive teaching from the market is that even the most readily breached S/R can re-assert influence strongly much later so I always leave my S/R lines on the chart until we have totally escaped that price zone.

Depending on the markets you trade, it might also be worth marking the upper and lower limits of overnight gaps as potential S/R.

More contentious is whether a trend line or MA can be classed as S/R. I see the S/R potential of trendlines and channels frequently confirmed but am sceptical of MAs in this context.

 

[apmf]

Cheers Andy,
Your posts explains it all. There is no right or wrong answer its just a matter of holding a particular level or not holding it. However, I have come to the conclusion that most recent level where Supply exceeds Demand or viceversa will act as Resistance & Support temporarily on that particular TF or to say most people will watching those recent levels compared to the old ones.

 

[Splitlink]

Hi apmf - A counter-intuitive teaching from the market is that even the most readily breached S/R can re-assert influence strongly much later so I always leave my S/R lines on the chart until we have totally escaped that price zone.

Depending on the markets you trade, it might also be worth marking the upper and lower limits of overnight gaps as potential S/R.

More contentious is whether a trend line or MA can be classed as S/R. I see the S/R potential of trendlines and channels frequently confirmed but am sceptical of MAs in this context.

Sceptical of MAs? I'm sceptical of everything. Nothing works better than sixth sense and that only works, in my case, when I am there, sitting with the developing chart. That is why I am so unfortunate when I am at work during the afternoon and why I prefer to close the position while I am gone.

HLs, simply, can be anywhere, but folk swear by them. That is why they put stops and orders, which are registrered at the exchanges, all around them. Information which, IMO, is released to the MMs who, in their turn, spike them out.

 

[tomorton]

Hi Split - Sixth sense..... the only time I ever allow myself to be swayed by this is when in a position and something tells me to get out (zero position equals zero risk).

Yes, HLs are visible to everyone and so can be readily targeted. But I couldn't sleep with the risk of contrarily putting my stops and orders where everybody else thinks they should not be. That might condemn me to be wrong, with the crowd, but there's no point me trying to catch crumbs from tables where lots of people are not eating.

 

[Splitlink]

I have been a believer in close stops for many years but have, now, come to the conclusion that they can only be justified if one knows, without doubt, that the price is going to move in the required direction immediately on the open. If that is the case, why have them? My stops are well away from, what I think, is potential spiking and in a position to give me peace of mind in the case that a computer, or site crash, may occur. Otherwise, I get out when I think best, manually.

As I said, I tend not to be a fortunate person when i am away from the computer, so I prefer to close my trades when I go. If I am making a good profit, I may put a stop on and leave it at that, that's all.

Sixth sense plays an important part of my trading style because I am a trend follower. Those who follow averages, etc, will come to the inevitable whipsaw , sooner or later. I have not been able to
ignore that gut feeling that tells me that that the run may be over.

 

[Splitlink]

Andy,

MA's indicate a trend and it's all the law of probabilities that go on in the user's head. To me, a falling ma, pierced over to the up side gives a probability that the price will reverse to its original direction, depending on the steepness of the average's decline.

I don't think that HLs are the answer, an argument can be made for putting one where you like.

Anyway, I think I've been here before and it got me into hot water.

Getting all this right is an art.

The art of approximation.

Split

 

[nunrgguy]

MAs: bad
Drawn diagonal lines: good

Really? What is the difference? In the singular all either show is which way price has been moving and how quickly

Multiple MAs based on different time settings can show how price has been moving from different time perspectives on the same chart i.e. on a Forex 1 hour chart the 24MA will show the 1MA approximately from the daily. But looking at the 24MA on say the 15min chart isn't going to be particularly relevant.

So MAs can save you the bother of drawing lines. They're essentially the same thing. And as Split says what they're showing you is rate of change - momentum. Trend is debatable.

Horizontal lines...what's the betting the most important ones line up with prices in the regions ending in 00, 50 and to a lesser extent 20 and 75?