Support and Resistance - How do you determine it?

[euroforex]

S/R

S/R is at my core of technical charting - based on Fibs. I start out the week with the greatest S/R levels - work my way toward 5M. During my intraday trading I'm constantly resetting S/R keeping in mind the most sufficient S/R prices in the last two weeks. These levels also provide me consolidation - ranging areas coupled with candlestick formations. One thing that makes traders trigger happy is the "stop hunt" break through on a S/R levels - that fakes out with a pull back. Right now as I write this AUDUSD broke out at resistance of .8474 and dropped all the way down to the previous spike support of .8382 and is now retracing up 15 pips now. The key is watch and see these levels tested from 30mins to 1hr and then ride the breakout trend...

 

[Arthur Beck]

By definition a trend is formed by S/R....higher peaks and troughs(dips) for an up trend and lower peaks and troughs for a down trend. The peaks are resistance areas and the troughs are support areas. Their rolls are reversed when trend reverses. Contrary to what some have commented, they are important to all professional traders. For them the type of S/R is important as well. How was a particular S or R formed? But this would take us astray from the basic question proposed here. In addition, as mentioned in the thread, there are other S/R areas as well. Fibs, Moving Averages, Round Numbers, Higher Time Frame candles, Fractal candles, Consolidation areas the day's High and/or Low, etc., can all be S/R areas. This does not necessarily mean they are reverse areas, they can also be just stall points or have little impact. A lot depends on time of day and the ADR (average daily range), already put in for the day. As suggested, an overview of stronger S/R on longer TFs (time frames), should be looked at before the day's trading is started. Stronger S/R would be where if you draw a horizonal line it crosses through a number of past peaks or troughs. This is important because of the adage that "price loves to go where it's been before". The most recent are the most important. It is good to know where these areas are. I do not draw lines, but make note of areas I want to watch for. Other concerns should be Fibs(especially the todays or yesterdays if still early), drawn from H to L, or from L to H, and Areas of Consolidation (3 or more candles going sideways), which mostly occur at fib levels. Also recent H/L (high lows), and DR (daily range). This will then give you an over view from which to zoom in on the day's trades. For a more comprehensive discussion of the subject I would recomend John Murphy's, Technical Analysis of the Financial Markets, the traders bible of chart analysis. Arthur

 

[mahmoods]

Hi All
When I want to put S/R on my chart I go to 4H and Daily chart and look for revers candel,, some times I find it diffecult so I am using now an indicator support and resistance (Barry)