Quote:
Originally Posted by kagein
At the present time i view each s&r line equally and just look at price set ups around each one.
I do take particular interest in lines drawn from the daily chart, however they can be far apart, how do u decide which minor s&r are attracting the most attention?
Do you look at how many times it has tested a zone and hence apportionate weight to each particular line?
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The significance of a potential support or resistance level is heightened by the reactive behaviour in & around it’s vicinity. Remember, it’s the general zone which harbours most of the potential activity, & that zone can quite often stretch to a 20-50+ pip channel of interest.
If price is re-visiting a previous level of intense traffic (such as this current support/demand zone on the GBPUSD between 9710 & 9775), then you can expect volatile & erratic behaviour.
You only needed to glance to your left & check the reaction from the nearest 2 visits in late February & mid March to anticipate increased interest as price again vibrated towards it late last week/early this week.
These levels have to begin somewhere though, yeah? We simply work from right to left when adjudging the potential of a reaction zone & carry those levels forward to assess their relevance in future price activity. Once a level loses it’s significance we adjust the specifics & continue to observe the behaviour.
Always look left!!
If your primary template is the Daily timeframe, then sure, most of your priority levels will emanate from there. Secondary levels could be observed from a 4 hour or 1 hour viewpoint if you’re seeking intermediate confirmation.
But essentially, you’re looking for levels or zones of activity, which have displayed previous strong attraction for players. The further back & more often those zones reacted, the better.
Tess, Jim & their crew mostly plot their primary action levels via the 4 hour timeframe. I then utilize & cascade those levels down onto my micro timeframe templates & my guy’s execute according to our specific aims & intent at the time.
If a level or zone is a genuine s&r reference then it’s going to react & offer opportunities whether you’re a micro (tick-1min) or a macro (240m-daily) timeframe trader.
The execution is secondary. It’s where you execute & how the execution is managed which deems the exercise productive….or not.