Hello buddies, please should I draw support and resistance lines at the wick of candlestick or at the body? Where is the best to draw them?
They should be at the highs and lows of the entire candlestick range.
However, don’t assume that although you can draw them with great accuracy, that that is how the market will behave. As some people say, s/r levels are often better drawn with a crayon than a pencil.
Thanks a lot
Also note that sometimes you can have a “zone” which is simply an area where several support or resistance lines coalesce. You should pick one of such lines and wokrk with it. There is no need trying to get that “perfect fit” because at the end of the day prices will move according to major news releases and overall trader sentiment, not the fancy lines on your chart.
like nubee said, there is no line in the sand, look at it as an area where price might reverse, bounce, range etc(spike) work on price action patterns around these areas, so u d know how to identify which is which(short bounce, continuation, or mean reversal etc). hope it helps
I draw them exactly at the end of their tails, precision matters there and you have to consider complete moves that a candle made to draw correct lines. It’s not as easy as it may seem
I think that with too much precision, you might lose whole picture. There are certain levels at which might be treated as important or psychological levels for that currency. Try to identify them instead of searching for exact top or bottom of candlestick
Taking a slightly wider perspective, it seems that every trader will draw a different total of s/r levels, of different depth and of different significance on the same chart. This lack of objectivity also implies that the same trader could look at the same chart some time later and likewise draw a different total set of s/r levels, of different depth and of different significance.
Does anyone draw s/r levels using an objective set of rules? Or maybe automatically include/exclude certain levels based on a set of rules? Maybe there is a defined measure of leeway that traders apply when setting these levels?
I’ll put the chart on the monthly time frame zoom out and use the adx indicator, not the plus and minus lines of that indicator.
I’ll snap a horizontal line at the highest adx points adjusting to what seems to hit the most candle areas… somewhat difficult to explain but you will see it as you move the line up and down at the adx spikes.
I do this using a different color for the weekly.
These are simply zones or areas to be aware of. They are not hard and fast support resistance for supply and demand. What it can do is give you a heads up to really watch PA at these levels.
I found this helpful for my trading style of daily and weekly charts. Ymmv.
You could look to draw one line at the candle stick bodies and another line at the highs/lows of the wicks.
This would create a Support or Resistance zone between the two lines…
Some mortals find this helpful, others do not.
Exactly this it gives price some breathing space as it were to react , alone just isn’t enough and too rigid .
It’s really a personal preference. I try to draw them at the body to cut out noise from news events. With horizontal S/R lines on longer time frames it can be more difficult, so you don’t worry too much about accuracy and look more towards creating wider zones, as mentioned earlier. In fact, when I draw lines for chart patterns (diagonal) I will switch to a line graph for accuracy. But regardless of how accurate you make any of your lines don’t expect price to come back and hit that exact spot.
Here’s an example of a bar graph vs a line graph:
Here is a challenge to any S&R trader. Draw a few random horizontal lines on a blank chart. Now drop any chart you wish. You will find that most of these lines will have S&R swing points. Don’t believe me - test it out for yourself.
This is a very interesting topic.
Currently, i believe that drawing S/R comes with screen time. Because personally i draw them on the wicks, but in some situations, you are gonna need to find a way to draw an area.
The problem with areas is that they are not as reliable, as a line that you can draw to the pip. Basically the sharper the level that you are expecting a reaction from, the better the trade.
50% on price of wick much better