How to accurately find the point of resistance and support?
How to accurately find the point of hesitation on the schedule?
It is very important! Almost every trading system or method of trading, at least, takes into account the key levels of support and resistance.
This method allows to determine not only the point of support and resistance, but these points are also points of hesitation.
Do you think that you know where support and resistance, but whether you know it?
How do you know where there are actually support and resistance?
The problem with the support and resistance is that they typically are not specific. This is not an exact point on the graph, where the price will go without hesitation.
In fact, the support and resistance - an area, rather than the exact number, as if we do not want.
Herein lies the problem - because we need for our calculations the exact values of the points of entry and exit. We can not enter in the area of $ 50.10/20, when using Fibonacci levels or calculate their feet and limits. We need the exact values, while the levels of support and resistance are not precise numbers.
Try to tell your broker that you want to install a stop-order somewhere between 50 and 55 and see what he will answer you.
This issue will be discussed in this article, the technique developed by the author, which is well suited not only to identify strong points of resistance and support, but also points of variation.
To find resistance and support, you must first determine the point of market fluctuations. There are various ways to do this, but here will be used by someone who himself has benefited from for many years.
Vibration top
For purposes of determining the points of fluctuations we are not interested in opening or closing of bars, but only the maximum and minimum.
Take any bar, and mark it as the start bar (S). If there are two consecutive higher maximum than that of the bar, which you noted as (S) then we are rocking up: eg bar (1) has a higher maximum than the bar (S), a bar (2) has a higher maximum than the bar (1). If there are no two higher highs than the bar (S), then you move on to the next bar, and see whether there are two consecutive higher maximum.
This may be particularly useful if the market traded sideways trend and you are trying to determine the point of breakthrough. Maybe a lot of peaks and troughs, but for us there is only one valid point - and that is the most recent fluctuation up or down.
Look at the following schedule
You can see that although there were several maxima and minima, which would you take as a support or resistance, but only in the bar (M) has identified certain point fluctuations, and you could mention a bar (K) as (S).
Fluctuation down
To determine the points of fluctuations take down any bar on the graph, and mark it as a starting point - a bar (S). If two consecutive bars make lower minimums than the previous bar, it is the fluctuation down: eg bar (1) has a lower minimum than the bar (S), a bar (2) has a lower minimum than the bar (1 ). If there are no two consecutive lower wage, then it is not a point of hesitation and you move on to the next bar. The same as in the example above, you can see the fluctuations down. Even at that price has made several maxima and minima, we have been able to bar (M) only bar (K) noted as a point (S)
Support and resistance
Once we have clearly identified points of fluctuation, we can continue to identify our points of support and resistance.
As you can see on the graph, there are marked fluctuations in all points up and down fluctuations. When we are in a descending trend, while a downward fluctuations act as resistance, and when we are in an upward trend, a fluctuation up acting as support.
While noting the points of support and resistance, the use of this method for determining the initial points of fluctuations will allow you to determine the point on the graph to calculate the stop orders, limit orders, and the design of price movement.
How to accurately find the point of hesitation on the schedule?
It is very important! Almost every trading system or method of trading, at least, takes into account the key levels of support and resistance.
This method allows to determine not only the point of support and resistance, but these points are also points of hesitation.
Do you think that you know where support and resistance, but whether you know it?
How do you know where there are actually support and resistance?
The problem with the support and resistance is that they typically are not specific. This is not an exact point on the graph, where the price will go without hesitation.
In fact, the support and resistance - an area, rather than the exact number, as if we do not want.
Herein lies the problem - because we need for our calculations the exact values of the points of entry and exit. We can not enter in the area of $ 50.10/20, when using Fibonacci levels or calculate their feet and limits. We need the exact values, while the levels of support and resistance are not precise numbers.
Try to tell your broker that you want to install a stop-order somewhere between 50 and 55 and see what he will answer you.
This issue will be discussed in this article, the technique developed by the author, which is well suited not only to identify strong points of resistance and support, but also points of variation.
To find resistance and support, you must first determine the point of market fluctuations. There are various ways to do this, but here will be used by someone who himself has benefited from for many years.
Vibration top
For purposes of determining the points of fluctuations we are not interested in opening or closing of bars, but only the maximum and minimum.Take any bar, and mark it as the start bar (S). If there are two consecutive higher maximum than that of the bar, which you noted as (S) then we are rocking up: eg bar (1) has a higher maximum than the bar (S), a bar (2) has a higher maximum than the bar (1). If there are no two higher highs than the bar (S), then you move on to the next bar, and see whether there are two consecutive higher maximum.
This may be particularly useful if the market traded sideways trend and you are trying to determine the point of breakthrough. Maybe a lot of peaks and troughs, but for us there is only one valid point - and that is the most recent fluctuation up or down.
Look at the following schedule
You can see that although there were several maxima and minima, which would you take as a support or resistance, but only in the bar (M) has identified certain point fluctuations, and you could mention a bar (K) as (S).Fluctuation down
To determine the points of fluctuations take down any bar on the graph, and mark it as a starting point - a bar (S). If two consecutive bars make lower minimums than the previous bar, it is the fluctuation down: eg bar (1) has a lower minimum than the bar (S), a bar (2) has a lower minimum than the bar (1 ). If there are no two consecutive lower wage, then it is not a point of hesitation and you move on to the next bar. The same as in the example above, you can see the fluctuations down. Even at that price has made several maxima and minima, we have been able to bar (M) only bar (K) noted as a point (S)Support and resistance
Once we have clearly identified points of fluctuation, we can continue to identify our points of support and resistance.
As you can see on the graph, there are marked fluctuations in all points up and down fluctuations. When we are in a descending trend, while a downward fluctuations act as resistance, and when we are in an upward trend, a fluctuation up acting as support.While noting the points of support and resistance, the use of this method for determining the initial points of fluctuations will allow you to determine the point on the graph to calculate the stop orders, limit orders, and the design of price movement.
Mark McRee
www.daytradingcoach.com
www.daytradingcoach.com
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