Guys how is every one! Hope you guys are doing fine…i have struggling to decide on how far back should i look to spot support and resistance levels.example how far back should i look for s/r levels on D1 chart, H4 chart, H1 chart and M30 chart?
There can’t be a right answer to this.
I was watching a clip recently where the guy had a support line from a 1985 low connecting to a 2019 low on a weekly chart. This obviously represents a feature starting over 1700 bars back across 34 years - quite incredible. But he was quite certain this support is about to come into play again.
He might be right, he might be wrong. It almost doesn’t matter because the s/r line is drawn to help him plan his trade, not to predict what the market will do. He draws the line to gauge his risk tolerance: once its in place, he can work out a stop price, and from that a target price, and from these position size, pyramid price, position cut price, re-entry prices, etc. etc.
S/r lines are guides to your trade, not a diagnosis of what the market is going to do.
Yes, it all depends on the particular strategy and the time interval you are going to keep your position opened. In most of the cases, you should pay attention to the support / resistance levels on the particular timeframe you are using (like M5 or M15) and also on one of the higher timeframes (H1 or D1). Some of the traders even use three timeframes simultaneously. For example, once I`ve found that combination of M1, M5 and D1 works great for daytrading since some of the patterns could be quite difficult to distinguish on one timeframe while they are clearly visible on another one. So, you can test all possible combination and find one that fits best your strategy and trading style.
Thank you for the answer
Absolutely agree with @tommor @J_C_Anderson.
They are used based on your trading style. Some people focus on some particular timeframes to analyze the support/resistance level so that they can make one for the new one - they are done not to predict the market’s situation, but your trading’s situation.