how to work out support and resistance

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jonboy123

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hi, say if im looking at finding swing trading opportunities.
I hear i need to really understand and study sup & res concept.

How long on the time frame should i be using to find the sup and res levels?

Would i need to draw the sup and res levels myself?
or does software do it for you?

How would i find the sup and res levels?
Ive read the relevant chapters in the books.

WOuld i just visually look to see where two lows or two highs happen?
and then roughly find something like tthat?

thanks.
 
jonboy123 said:
hi, say if im looking at finding swing trading opportunities.
I hear i need to really understand and study sup & res concept.

How long on the time frame should i be using to find the sup and res levels?

Would i need to draw the sup and res levels myself?
or does software do it for you?

How would i find the sup and res levels?
Ive read the relevant chapters in the books.

WOuld i just visually look to see where two lows or two highs happen?
and then roughly find something like tthat?

thanks.
Click to expand...

You can either do it your self? using pivot points
PP = (HIGH + LOW + CLOSE) / 3R1 = 2 * PP - LOWR2 = PP + HIGH - LOWR3 = 2 * PP + HIGH - 2 * LOW

S1 = 2 * PP - HIGHS2 = PP + LOW - HIGHS3 = 2 * PP + LOW - 2 * HIGH


Where:
PP — the central axis (any price can perform as it);
R1, R2, R3 — the 1st, 2nd and 3rd levels of resistance;
S1, S2, S3 — the 1st, 2nd and 3rd levels of support;
HIGH — the max price in the previous period of the indicator;
LOW — the min price in the previous period of indicator;
CLOSE — the closing price in the previous period of indicator.


OR


you can download an EA at MetaTrader 4 which can it for your self.


When it comes how to use them ! it depends of your stradegy and the product! download a MetaTrader Demo (from Alpari,Odl,InterbankFX,etc) and try your stradegy :)
 
Magos is talking about pivot points.

These, like diagonal trend lines, channels, mas and fibs might or might not be support and resistance.

True support and resistance is horizontal and its based on what price has done before. When it runs up against a point and then can't get thru ... that is meaningful. So look at charts and look at what happens where price runs up against prior zones of contention. How many times does it work? After so many times is it likely to break through? Does resistance become support and so on.

Edwards and McGee (spelling?) do a bit of work in this space but there should be some threads on it here too.
 
Magos said:
You can either do it your self? using pivot points
PP = (HIGH + LOW + CLOSE) / 3R1 = 2 * PP - LOWR2 = PP + HIGH - LOWR3 = 2 * PP + HIGH - 2 * LOW

S1 = 2 * PP - HIGHS2 = PP + LOW - HIGHS3 = 2 * PP + LOW - 2 * HIGH


Where:
PP — the central axis (any price can perform as it);
R1, R2, R3 — the 1st, 2nd and 3rd levels of resistance;
S1, S2, S3 — the 1st, 2nd and 3rd levels of support;
HIGH — the max price in the previous period of the indicator;
LOW — the min price in the previous period of indicator;
CLOSE — the closing price in the previous period of indicator.


OR


you can download an EA at MetaTrader 4 which can it for your self.


When it comes how to use them ! it depends of your stradegy and the product! download a MetaTrader Demo (from Alpari,Odl,InterbankFX,etc) and try your stradegy :)
Click to expand...

thankyou thankyou thankyou

this one?
Forex Trading Platform MetaTrader 4

whats an EA?

youre first method is too complicated for me to fully understand yet.
 
nine said:
Magos is talking about pivot points.

These, like diagonal trend lines, channels, mas and fibs might or might not be support and resistance.

True support and resistance is horizontal and its based on what price has done before. When it runs up against a point and then can't get thru ... that is meaningful. So look at charts and look at what happens where price runs up against prior zones of contention. How many times does it work? After so many times is it likely to break through? Does resistance become support and so on.

Edwards and McGee (spelling?) do a bit of work in this space but there should be some threads on it here too.
Click to expand...

thanks. yeah im beginning to understand.
selftrade allows drawing horizontal lines.
so where kinda two points roughly match up....can be a support or resistance? so i can do it roughly by eyesight visually ?

should i be using candlestick chart?

so support and resistance study of a companys stock would help me decide on what price range to make a buy, right? ie around the support level..
 
I am currently backtesting an EA which trades when a support or a resistance is broken.
Supports and resistances are dynamcally calculated. First results give Profit factor > 5 and Win factor > 80%, so I will use this EA.
 
Pat46 said:
I am currently backtesting an EA which trades when a support or a resistance is broken.
Supports and resistances are dynamcally calculated. First results give Profit factor > 5 and Win factor > 80%, so I will use this EA.
Click to expand...

what is EA?
 
nine said:
Magos is talking about pivot points.

These, like diagonal trend lines, channels, mas and fibs might or might not be support and resistance.

True support and resistance is horizontal and its based on what price has done before. When it runs up against a point and then can't get thru ... that is meaningful. So look at charts and look at what happens where price runs up against prior zones of contention. How many times does it work? After so many times is it likely to break through? Does resistance become support and so on.

Edwards and McGee (spelling?) do a bit of work in this space but there should be some threads on it here too.
Click to expand...

I like your use of the word TRUE? what about telling that Technical Analysis is an ART and that we are all artists!

When it comes to TA (Technical Analysis), each person can have a difficult understanding of the market (different strategies ,patterns ,methods, implementations ,levels ,etc a million other things) but basics are basics, due to the fact that market is based on Micro and Macro economic factors.

What young traders must understand, when they start becoming profitable that one day the pattern can change, therefore they have to be dynamic and change their style.

A trader should never limit them self’s only in TA.!


According to investopedia

Reviewing Different Types of Traders
Before we focus on swing trading, let's review all the other major styles of equity trading:
• Scalping - The scalper is an individual who makes dozens or hundreds of trades per day, trying to "scalp" a small profit from each trade by exploiting the bid-ask spread. (You can read about scalping in Introduction to Types of Trading: Scalpers)
• Momentum Trading - Momentum traders look to find stocks that are moving significantly in one direction on high volume and try to jump on board to ride the momentum train to a desired profit. (You can read about momentum trading in Introduction to Types of Trading: Momentum Traders.)
• Technical Trading - Technical traders are obsessed with charts and graphs, watching lines on stock or index graphs for signs of convergence or divergence that might indicate buy or sell signals. (You can read about technical trading in Introduction to Types of Trading: Technical Traders.)
• Fundamental Trading - Fundamentalists trade companies based on fundamental analysis, which examines things like corporate events such as actual or anticipated earnings reports, stock splits, reorganizations or acquisitions. (You can read about fundamental trading in Introduction to Types of Trading: Fundamental Traders.)
.. trades that are right because for some reasons he only can understand!
 
jonboy123 said:
thanks...so the link i posted was not the right one?
alpari....

this is confusing me....metadata is diff companies doing diff products?
Click to expand...

it is right man... go on the main website and find the link to download the demo.. that is just the main page. Alpari has only currency pairs.. odl does cfds and commodities.
 
Jonboy,

You could do worse than looking through trader_dante's "Making Money Trading" thread. Settle down for a few days (at least) quiet reading and study (no trading). Then go back and read it again.
Let it all sink in. Then study chart after chart after ... and paper trade.
 
montmorencyt2w said:
Jonboy,

You could do worse than looking through trader_dante's "Making Money Trading" thread. Settle down for a few days (at least) quiet reading and study (no trading). Then go back and read it again.
Let it all sink in. Then study chart after chart after ... and paper trade.
Click to expand...

thanks

yeah man...ive been making silly trades...and paying the price...im at a loss...
i need to study and learn more.
Ill check out dante thread.
 
jonboy123 said:
thanks

yeah man...ive been making silly trades...and paying the price...im at a loss...
i need to study and learn more.
Ill check out dante thread.
Click to expand...

Good man. After that, the "postgraduate" course is perhaps the "Potential Setups", also initiated by TD.
This is extremely large now, so maybe read from the beginning for a while to get the gist, then concentrate on the more recent entries. However, try not to be tempted to treat it as a series of trading tips. It's for learning from the experienced guys, not just trading their trades blindly. It won't work (it might do a few times by luck, but not in the long run). You still have to mark your own charts and plan your own trades.

Good luck,
 
montmorencyt2w said:
Good man. After that, the "postgraduate" course is perhaps the "Potential Setups", also initiated by TD.
This is extremely large now, so maybe read from the beginning for a while to get the gist, then concentrate on the more recent entries. However, try not to be tempted to treat it as a series of trading tips. It's for learning from the experienced guys, not just trading their trades blindly. It won't work (it might do a few times by luck, but not in the long run). You still have to mark your own charts and plan your own trades.

Good luck,
Click to expand...

experience has to do alot but what about the 30 under 30 traders ?!
some of them are realy great, I am happy I personaly know some.
You can call it talend, luck what ever...but in the end of the days it pays the bills :p
 
so where kinda two points roughly match up....can be a support or resistance? so i can do it roughly by eyesight visually ?

should i be using candlestick chart?

so support and resistance study of a companys stock would help me decide on what price range to make a buy, right? ie around the support level..

does support and resistance need to be established using a weekly or daily chart ? or i can use wahtever time frame?
 
Jon have a read of this:

Support & Resistance Basics

Magos, out of interest have you got that EA for the support and resistance or pivot points? I have just downloaded Metatrader and would be good if I had something that automatically plots pivot points as I am trying to learn how to trade with a pitchfork. Cheers!

Sam.

P.S. I haven't got a clue how to program an EA or install it or whatever you do as I only just downloaded meta trader!
 
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