Support and Resistance-Horizontal Lines from today_2
Attached are two higher timeframes on the 6E, the 15 minute chart and a 25 range chart. I have added one line to each chart at the same location to show support / resistance. Is this price action random? Or do we think that when areas are established traders begin exiting / adding positions in those areas?
There is one other thing about where this line is that we will talk about in later posts. Can anyone tell me what it is?
Excellent analysis/education as always I can't post any charts yet (reinstalling). But i'll be interested to see how drawing a pitchfork at your last EUR chart would look like. As well as the 50%-100% res./supp. levels A-La "trendisyourfriend" manifesting in that chart.
The following user says Thank You to babypowder for this post:
The next support and resistance is round numbers. For this example I am using the 6E. The 6E is priced with a number, period, and four/five more positions depending on your broker. For example, X.XXXX
Round numbers must be watched. Your mileage may vary but for the 6E, the major round numbers 1.36, 1.37, 1.38, etc. are magnets. Look at the attached chart from 11/26 until today. I have constant lines on the chart from 1.29 through 1.38 place .01 apart. Yes, price blows through sometimes. But look at how many times price gets there and pauses or reverses or touches it just to the tick.
I've added CL and ES just for fun too.
You can also see this in smaller round numbers if you lower the timeframe. Look at your instrument and analyze it.
How do I use this? Targets and trails. For trails, I talk myself through a trade such as, "If I'm going to stay in this trade it must penetrate and break XXXX number. If it penetrates and the number holds, I'm out." Look at attachment 4 where I have the circle. I exited a trail today at the circle because it hit 1.358 and would not continue.
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The following user says Thank You to Big Mike for this post:
ok i see what you are saying now
well to be honest, i don't feel too confident in those kind of lines. I mean, if i'm trading and a round number come, i will keep an eye to the monitor but i will not expect in advance any particular move. Well it's not easy to explain, i really need to download some software to mark up charts
for example, in reference to the chart we were talking before, the line was 1,600 if i'm not wrong, but i would prefer to consider that line as the support of a trading range that is also 1,600 and not teh opposite way around.
well, i hope you don't mind for my dump consideration