Where is resistance/support measured from?

[aparoid89]

Is it taken from the high/low of the bar or the open/close of the bar?

 

[bbmac]

Current gbpusd is a good example with which to answer this question...see 1hr chart below the area circled is a previous 1hr (and 4hr) swing hi zone so the 'zone' of resistance is between the highest hi and the highest close and you can see there have been 3 x subsequent attempts of price to move higher and each time supply in this 'zone' has seen it repelled down. Ie in this zone there have been continuing imbalances of supply over demand that has seen price fall from here.

Remember too that there are other factors than previous swing hi/lo zones that can see supp/res...fibs, trend lines etc but over and above these it is the previous swing hi/lo's that shown you where the imbalances actually existed as opposed to may exist if tested. Generally speaking the higher the t/f the previous near-term (relative to what you can see on the chart) swing hi/lo exists on - the more meaningful as potential support/resistance it may be.

So the answer is that it is more a zone as decsribed above than specifically at the hi , lo or close..this is my experience anyway and this methodology features as as an important part of my own trading edge.

G/L

Is it taken from the high/low of the bar or the open/close of the bar?

 

[bbmac]

.......

Look at current 4hr gbpusd...see where the most obvious near-term previous swing hi/lo 'zones' are...judge price action on t/f's below this (1hr and below) as to whether imbalances may exist again at these area. The colours are just a key that reflect whether the swing hi/lo on this t/f co-exists with a near-term obvious swing hi/lo on the daily t/f and whether if not, I consider that the swing hi/lo may be potentially weak in respect of it's ability to see future supp/res there, for certain reasons.

G/L

 

[natureboy]

bbmac is right that a zone is the best way to think of s/r. For visualization I like what these days is often called a zigzag indicator, comes from Filtered Waves by Art Merrill, moves of percent plotted via highs and lows

 

[TGS1]

A candle/bar/line is just a graphical representation of a time period and the action that takes place within whatever limit you have placed. Traders around the world are trading on everything from 1 second to weekly time charts and everything in between. So while your chosen time frame may be showing a pin bar, on another they might be closing up and then the next bar retreats back.

So what I'm saying in a roundabout way is use areas of S/R, not a hard and fast line in the sand.

 

[FXGroundworks]

Support and resistance is taken from area’s where price has attempted to go higher (or lower) and fails and corrects. You can’t take the highest pip for the day and call that resistance, you should go where most of the candle sticks try and attempt to break through.

 

[Stirf]

isn´t this great... This newbie asks a question and you guys are all kind enough to post an answer. But to my surprise... NOT... he never comes back for a further discussion or a "thank you". Probably a thread to keep the traffic going on the forum :cheesy:!

 

[Splitlink]

Hi bbmac,

That was a nice, useful, chart. The thing is that R&S zones, by themselves, are no better than pinbars and averages. It is when they are used in conjunction that they gain significance. Your trendlines and averages show that. The personal skill comes in selecting those trendlines and it has taken me a long time to get it right, well......sometimes, right.

 

[bbmac]

I would say that of all potential supp/res factors (ie previous price pivots, fibs, trend lines, and calculated pivots etc...) The previous price pivots (ie previous obvious near-term fractal swing hi/lo's showing actual near-term obvious imbalances of supply/demand -and- demand/supply respectively,) are the most useful in the respect that they show where there was actually cuch an imbalance in the recent past. Wherea,s the other potential supp/res factors don't , - these only show studies that may see such an imbalance if sufficient market participants/volume acts together at them to create such.

The confluence of the potential supp/res factors are where the highest probability trading opportunities re potential supp/res live..but at what confluences ? - ie which are potentially stronger/weaker over any extended period ? Well that's for each individual trader to work out, should they utilise supp/res in their trading.

G/L

Hi bbmac,

That was a nice, useful, chart. The thing is that R&S zones, by themselves, are no better than pinbars and averages. It is when they are used in conjunction that they gain significance. Your trendlines and averages show that. The personal skill comes in selecting those trendlines and it has taken me a long time to get it right, well......sometimes, right.