i don’t understand support and resistance.I have a indicator that draws trend channels for me but i wonder do i need horizontal support and resistance or can i use these trend channels only?
here is another pic to show how it connects swing high and low’s.So here is a dumb question do you need more than one swing high or low to count it as support and resistance to take in consideration or not?
PLease get back to me and tell me what you think
The chart shows the pair is in a range so there are no swings, your indicator won’t tell you that, take a tip from me, get rid of it.
i’m not sure i understand.It looks like a channel where it would be a good idea to buy at support or sell at resistance.
I have indicators that does that so when this indicator gives a buy signal after price bounced off support i want to use the opposite trend line as my profit target.Is that sound?
I still do not know whether you need multiple touch pionts for support and resistance to be taken into consideration
You can’t really confirm S/R with S/R, the basis of your strategy is OK, but it looks like a trending strategy and you are trying to apply it in a ranging market.
Remember this is my view, others may differ.
i see what you mean.You must be looking at the 1hr time frame.This is how it looks from my end using this indicator.
No, on the 15min it’s a range, on the 1Hr there is more of a trend, but trust me those indicators are a waste of time, been there done that.
I agree with purplepatchforex, but to add one more general point in response to your original post: opinions vary on how many ‘touches’ you need from a particular point for it to be considered Support or Resistance. Price can bounce once from a certain point and some people will mark it on their chart as a point of S/R, some wait for touches over a number of bars - it just varies according to the individual and the strategy, there is no hard and fast rule. Generally, the more touches the stronger the S/R, though.
well apartently adx agree with you.I have this handy trend power indicator that shows what the pair is doing over all the timeframes.It gives the value and it also shows you what the trend is.
I still have to test it though because where it clearly shows a ranging market today i’m afraid that overtime it will keep you from good opportunities.I quess the only way to to figure that out is to test it.
You cannot see it but you do get trending values on the 4hr and dailly frame.However from 5m to 1hr you get ranging markets.Will start using this indicator and so how good it really works.
the indicator is not useless, so don’t throw it away.
Actually, the theory behing your idea is sound.
But you need more confirmations than just that indicator.
In which case, how does it benefit?
thanks guys i think i know the difference between actual support and resistance and these channel lines.Now this might make me sound like an idiot but this trend channel indictor projects where price might find and support while tradional support and resistance is where price already found support and resistance.Does that make sense?
Anyway i happen to have a indicator that draws support and resistance for me.
Except that if you draw your own S&R lines (and these do not have to be horizontal) then you can see for yourself where you might expect price to interact with this line in the future, as you can see where the S&R line you drew continues. This anticipation of future price interaction is based upon your own analysis, rather than on an indicator, so I would personally favour it. You can spot channels and draw the lines for those yourself, too. Indeed, it is a good way to familiarize yourself with how the charts develop. If you rely on an indicator then there is a danger that you stop looking at the ‘why’, even if that indictor is reliable.
Agree with qwertymyfx, the indicator is not useless. In my opinion, your problem is in asking whether it represents s&r. Like Simon said, s&r can be subjective. If you are looking for s&r areas that everybody can see, you need to look at areas like prev day high/low, monthly and yearly highs/lows etc. Those areas can’t be disputed but bear in mind, whether they really provide s&r can be!
But again, why is not useless? What use does it have? I’m curious!
From what i can see from his pictures, is the indicator not just drawing on channel lines that most people draw manually? If it is, then why is that useless. Personally, I wouldn’t use an idicator to do it but then I wouldn’t say it was useless. It can give an impression of price action at a quick glance from whcih you could then go on to do further analysis…
A quick glance at a chart will tell you what’s going on much better, looking at the chart you can see it’s ranging, so there is no tradeable channel as such, but the indicator shows there is at the current settings, so maybe the settings need to be changed? but this is always the case with indicators, you need to set them for the current market, better to learn to read the current market than spend your time endlessly tuning your indicators.
So you agree then that this channel projects support and resistance much like fibonnacci or pivot pionts.Because these channel lines does continue beyond the current price.Do i understand it the right way?
But you still need to look at the price levels where price reversed forming a swing high or low that can also be support and resistance but which is a little subjective
I think that an indicator that draws support and resistance for you can be off a great learning aid.Anyway thanks for your input i think that i will use my support and resistance indicator for a while by making sure none of my trades are entered right on top of them and also as potentail profit targets.
I will also leave the channel indicator on my charts as well to make sure i do not buy right on top of this projected resistance or sell right on top of the projected support but do this in the opposite way.
Indicators are like cigarettes, you know deep down they are bad for you, but you just can’t give them up, and what you want to hear is that they aren’t that bad, and they help with stress and this that and the other, but having to give them up is not what you want to hear.
:D:D:D
IMO s+r is different from trendlines/channels.
For s+r technology I would advice noob to check out ‘Basic Chart Analysis Mthd’ for classical s+r techniques and conviction to dump ALL indicators. Basically proceeds to hang horizontal lines/zones starting from the MN1 timeframe down to the traded timeframe (4hr), simply placing lines at every sharp turn. Then lines touching only one or two points will be called scalps, and lines passing through several price turns & kinks will be s+r.
To check whether ones is doing it correctly, if you use a point back in time be sure to see confirming reaction around it later. I find that it is easiest to plot s+r with only the close price line, however bar-mode is also alright with the zoom set to farthest-out on any timeframe used, thus I keep switching back & forth as I plot them. As filter, lines should keep at least 100pips away from each other, but with colour-coding, having set s+r & scalps upto 4hrTF, I can now add lines of another colour and these I move around liberally, so the others can be always static. Consider s+r as zones not as sharp lines though PA sometimes takes them out as such. Since mt4 cant shade such zones, the lines that move I place them such that they show the zone limits for a particular s+r-/scalp-line.
To control population and chart visibility, set properties>visualisation such that lines set are visible on that timeframe and below only to keep visibility upon zooming out. For the same purpose, set them with chart soo zoomed out. Now say trading H4, lines set on d1 2yrs back and you want to see their basis would mean too much clicking & scrolling esp. for a touchpad. Since its a one-time thing, one can set the name and description parameters to reflect various attributes: like for ‘name’ would include type, price, date1(for main point at when it was set for), date2(when it was set), date3 (recent significant PA, or last date of moving, depends on which side of stroke in code below, max. three dates), timeframe, set on bars or close, e.g. “scalp 1.5850_010803/110410_mn1–bars” so when I mouse over the line whatever TF I’m @ I see just that, for every foreign object on chart; for description would show strength(e.g. 3turnpoints, 2kinks & 5wicks), when was last significant PA on it (5mn), etc.
***ps: in ‘parameters’ set values like 1.585002 so on chart it shows a nice round 1.58500 easy to keep in sight and memory.
To use them, think of ‘Great Bars @ Great Locations’ (credit to OP of above mentioned thread), i.e. watching for PA patterns and bars (the pins hammers, inside-bars and outside ones, lol) only at these lines and nowhere else. Must say almost every strategy and analysis I’ve heard uses s+r, cant fully state their importance. New concept shown by ICT at the youtube thread (‘What every trader doesn’t want to hear but wants to know’) for marking session, daily, weekly and monthly high/lows using short horizontal lines is working magic for all who read and implement the videos.
Using one of the two mt4 automated backtesting app/indi’s, on 4hr let it run taking no trades, just following pausing zooming in out setting various s+r/scalps high/lows and watching their reaction during slackening and strengthening daily volumes, to get ‘the feel’.
If I start on fibo and channel-/trend-lines I will have to come in with EWT which isn’t everyones best bite. Trendlines are useful for targeting as you say, I prefer not to call them s+r, too many of those already. The above rambling might only help you get the drift - one has to work further at practice and dump the indicators.
***ps: with such a systematic method for analysis I fail to see one trading more than three charts actively. The higher the TF the better the s+r (>/=4Hr)