Actually, you can [I][B]only[/B][/I] find them in hindsight.
[I]Past price action[/I] is precisely what they represent – those levels in the recent past where price has reacted, by pausing or by retracing.
When you open your Daily chart, you are probably presented with about 100 candles (100 days of price action). That’s normally enough range for finding valid S/R levels – [I]unless[/I] the pair you are looking at has been nearly dead flat (i.e., no significant price action) for those 100 days, in which case you would scroll back another 100 days or so to find those levels where there was significant action.
Start at the right edge of your chart, and look to the left to identify swing highs and swing lows. Pay special attention to levels that have been touched and have held 2 or more times. Not all S/R levels are equally important. Learn to distinguish between strong and weak levels. You can even use horizontal lines of different widths on your charts to alert your eye to the relative importance of the various levels you have identified.
Don’t overload your chart with too many S/R levels. Concentrate on the important ones.
As for deleting them, it’s perfectly fine to wipe them off every day, and start over with fresh eyes.
Old levels can get [I]really[/I] old.
No, absolutely not. [I]Pivot levels are totally arbitrary[/I], and are no substitute for real S/R levels.
The whole idea of pivot levels is that markets respect certain magic percentages of the previous day’s range. That’s [I]sometimes[/I] true, to the extent that a system like pivot points can be a self-fulfilling prophesy. That is, if enough players expect a market reaction at a pivot level, their own actions will contribute to making that reaction happen. But, this is a pretty weak basis for determining your S/R levels.
[I]Real S/R levels,[/I] on the other hand, display the actual, recent price action of the specific pair you are looking at. They show you something about the real-world, rather than magic percentages.
All that having been said, [I]pivot levels which happen to be in confluence with real S/R levels[/I] can offer you a degree of confirmation regarding those real S/R levels. To the extent that the true-believers in pivots take action based on those pivots, they will reinforce the real S/R levels where confluences occur. But, don’t base your trading decisions primarily on pivot levels.
I disagree completely.
Fibonacci [I]-- even more so than pivot points --[/I] is a system of magic numbers (23.6%, 38.2%, etc.).
Fibonacci retracement levels can serve to reinforce real S/R levels (as pivots can, as I described above), but they are no substitute for real S/R levels.
[I][B]In other words, you have to start by finding real S/R levels.[/B][/I]
If you can do that without “making mistakes”, then you can do without Fibonacci, altogether.
Maybe. But, don’t base your trading decisions [I]primarily[/I] on either one.
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