thanks i’d like to check out that book.Do you know the author?
It seems there is a lot of discretion involved when plotting support and resistance.I like to use an indicator and then delete the support and resistance lines that i feel is no longer valid.Here is a picture of the lines the indicator draws and the second one is where i deleted support and resistance and only left those that i feel are still valid.
Have a look and tell me if it is okay.
1.6000 Sterling not finding any buyers at the moment. This range market is just part of a bigger range that has support around the 1.5400 level as seen on a daily chart.
Try and keep in mind Kip that these S&R levels are more like zones than precise points.
when does support and resistance become out dated
For the short/medium term move it is outdated when it is broken with momentum, ie. not just a short break through and straight back again but a sustained movement of price through the resistance area. However, that level can still be of future relevance, look at a high timeframe chart such as the Weekly, squeeze it up and you will generally see various examples of the same level being respected, or at least stalling price, on a number of different occasions over a long period of time. An obvious example of this is parity on a number of the currencies - this is a psychological level that often creates S&R, even if it is ultimately breached.
If you take USDJPY for an example you can see that the only reference we have at the moment dates back to 1995!
On the same pair 102.00 provided major support in 1999 and was still a strong support 5 years later.
Its not a book, rather a thread in the holly gails section, ‘my basic chart analysis method’ by Phil386. Cant post charts now have to run off maybe laters, will be long post again.
thanks guys i think i have a idea how support and resistance works.Just today i got two buy signals which i skipped because it was right on top of resistance zone.Needless to say both of them would have failed.
hello guys
Here is the pics of this morning.The blue lines is where i got buy signals but i skipped them both because they were right on top of resistance.Have a look
Why on earth did you skip them? That is just a beautiful site for a trader, 3 test nearly to the pip, you don’t often get chances like that.
they were buy signals not sell signals.
they were buy signals.I know that some traders sell at resistance or buy at support zones but i don’t think i’d be able to trade that way.I’m using custom indicators that gives me buy and sell signals i just have to make sure i don’t buy right on top of resistance zones like the ones on my charts.
Good thing i did because any long trades would have been slaughtered.
I think you might need to have serious think about your strategy if that was giving you buy signals.
Yes but the indicators that gives buy and sell signals does not take into consideration support and resistance.That’s my job these indicators are only tools and you cannot follow them blindly.
