Does anyone use resistance and support zones? Ive been reading a bit about them and they sound like a good thing to use. The only thing im not sure on is how wide they should be? Currently ive been drawing the resistance line then having my zone 10 pips below and above it, but there must be a better way to make them more chart specific? Possibly in relation to chart volatility?
You’re going to find they are important to find if you’re trading reversals.
I hate trying to draw them because there’s no objective way to select the levels that might qualify. I can find the significant highs and lows and then start drawing in zones with a bit of allowance above and below and then I go back 3 months then 6 then 12 then 24 and before you know it I can’t even see price any more.
So if someone can enlighten you they would be enlightening me too. Not that its essential as I am a trend-follower which s so much easier anyway…
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I use a top down approach by starting with weekly, or even monthly, charts. I find MAJOR levels of support/resistance and draw a box taking in the low/or high up to/down to the wick. Has to be at
least two points too. You have to find areas where buyers stepped in to form support and sellers stepped
in to form resistance. This will show you, maybe, 2-4 “boxes” of S/R, and only then do I go down to a daily
to see if there is anything else. Any lower time frames and you may be getting too many boxes on your screen.
It’s actually easier when you watch someone…
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Sure, these are the main point to pay attention!
Sometimes it is possible to get perfect price by opening the position close to the important level with defined stop. And they are important on each timeframe.
Try to look for entry point just after the price get back inside the range
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So do you mean, if i was looking at a bull resistance level i draw a box from the point of the highest wick down to the close of that particlar candle?
That would be the height of the box, but you need more points to the left and/or right, just like with a one price support/resistance line.
You really draw the line like you always have, but give it a “zone”.
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