Hello everyone,
I’ve been trading in the fx market on demo for the last 6 months, switched to real account 2 months ago, and started seriously using metatrader for the past weeks.
I have a very simple (beginner) question: when drawing the support and resistance lines, what time period should i choose? Does it depend on my average holding time (short term/day trades vs swing/position trades) ?
Thank you very much!
ok
the Time Scale you use is up to you
it’s what you feel comfortable with
What you need to keep in mind is this
if you draw a support line (let’s say) on a 1 minute chart
it will not be as strong of a support as drawing a line of say a weekly chart
but if you are asking what do you use, between say Weekly or H4
up to you mate, whatever you like
i would suggest Using Multiple, not just one
[quote=“Martin_K, post:2, topic:134010”]if you draw a support line (let’s say) on a 1 minute chart
it will not be as strong of a support as drawing a line of say a weekly chart[/quote]
If prices are in the mix approaching a big figure or a well broadcast round number from either direction that’s well stocked with options & multiple stop order tickets, the level will still trade exactly the same regardless whether it’s plotted & highlighted on a 1 minute chart or a weekly.
It’s not the time view reference that’s relevant, only the grade of level plotted. And to expand that comment, activity was brisk & heavy around a few of those examples the past couple weeks at 1.70 on eurnzd, 0.80 on audusd, 1.00 on audcad, 1.40 on gbpusd, 110.0 on usdjpy & 26000 on dow. Certainly enough to collect a decent haul for those with the right tactics to play them.
No… i wasn’t referring to that
of course Price traded tick by tick and time frames are merely an extension of the tick by tick data.
yes. instruments trade the same on a 1minute chart as they do on a Yearly chart because price movement is price movement regardless
but your question was this
you’re now on a different topic and a different train of thought.
all i was trying to illustrate to you was because of how candlestick mathematics works.
you will quicker see a break through on support and resistance levels that you draw on a 1 minute chart , than you will on say a Daily chart
do you understand what i mean ?
now given your last response to me vs your first response
it now appears that you do understand how these things work
so… My question would be, why are you asking the question where should you draw them.
when you asked, i assumed you were a complete beginner and didn’t understand time frames.
it now appears you do understand them
this in turn means you should have enough knowledge to be able to decide where to put your support and resistance lines
as other options
Why don’t you try pivot points
why don’t you try Fibonacci
Pivot points are actually pretty good and will likely put the lines where you would have put them anyway
maybe give those a go
but the answer to your question is… I’ts ultimately up to you mate, it’s not an exact science , it’s something you figure out over time by playing with the charts and seeing if your line placement skills hold true to what is going on in the market
Hope that helps
??? it wasn’t my question, it was amchfi’s.
He hasn’t responded to you yet, he’s only posted once on the thread.
There are but 4 replies & 2 of them are yours.
Thanks Martin_K, although I think there was a bit of a mix in your answer, it was me (amchfi) who posted the question and @compact gave an answer that you thought was mine.
I will look into pivot points and Fibonaccy in depth as soon as i’l more comfortable with levels and candlesticks.
Thanks man, very helpful!
Martin_K and compact have got it spot on. Just to add to this, Support/Resistance levels may also be dependent on the particular kind of strategy you are deploying. In this way they may be limited to being very effective in one time frame or may extend to have effects on multiple time frames. Also, do look at pivot points as you said and look into round numbers as well. All the best.
Peace out
As you are very new, I would suggest you to use higher time frame, though it solely depends on your comfort. But in lower time frame price moves quickly in either direction which causes newbie to open trades every now and then. I see lower time frame as threat to trading psychology for newbie.
@compact
hehe
sorry mate, My bad,
not sure how that happened
You’re right it wasn’t your question, My Mistake mate.
thanks for bringing that to my attention.
I wouldn’t waste your time if I were you. They’re about as much use as all the other colourful, unnecessary eye candy such as moving averages, trend & channel lines, pretty patterns, dots et al.
Most of the heavy action is attracted to the figures/round numbers on currencies as it’s where the bulk of orders are stacked, shuffled & dealt.
Focus on establishing a game plan based on the action leading into & away from those levels using a short-medium term momentum/trending set up, avoid littering your charts with all that unnecessary junk & you’ll filter out & capture more opportunities than you can shake a stick at.
If you’re smart you’ll avoid all the hype.
If you’re not, you’re in for a long, frustrating & very rough ride.
@compact
i agree,
but , if you test something and it proves to work, then it’s not hype… is it ?
i fully agree with you that eye candy is simply BS that is not worth bothering with.
however, i have found a few indicators to be Very useful and have proven time again to be accurate
Pivot Points are one of them, On Longer Time frames though
Fib levels
Heiken Ashi strangely has proven to be good and reliable
to a lesser degree, but still feasable. Bollinger bands
if these indies AT ANY TIME for me, prove that they are not worth their salt, so to speak, i will bin them.
but they keep proving reliability
so… you can’t call them hype if they keep proving they can work.
hence why i SUGGESTED he have a look
because everyone trades different and these are not for everyone and may not work with everyone’s trading
I’m just speaking for my own, of course
Thanks man, i’ll take the next couple of weeks to get familiar with pivots and round numbers and start apllying them, as it seems many of you are recommending those!
@compact @anon81929759 Thank you guys so much for the straight candid advice, I truly appreciate it.
Eventhough i have just started with this, i can somewhat relate to what compact said. When i first used metatrade, it made me a little insecure and doubtful, i thought i had to “master” all of those indicators, constantly have them on my chart, and looking for past successes/failures of those. But i definetely thought that a successful trader wouldn’t use all of those, as it would be just… distracting, more than anything, i think.
That being said, i like martin_k’s point and i think at least having a rough idea of all the indicators etc would be the good move for me now.
Thank you guys so much again, if you have any more advice, truly appreciate it!
Absolutely right way you have started your trading journey. I appreciate your move. Most of the trader do the mistake of not starting their live trading without demo trading. If they do the demo trading than they will get their confusion clear by asking questions like you. But brother, I wanted to say that time period of your trading is totally upon to you. No one’s time frame will match with your suitable one. You have to find out the right time for your deal by doing lots of practice.
@compact
It seems to me that you have quite some years of experience in fx trading.
As I mentionned earlier, I am relatively new to this. So far, I have managed to stay away from rough newbie mistakes, I started by fixing a clear realistic goal in my head: this is not for me to get rich in months, this is for me to become financially secure over a certain period of time. After reading a few books and starting the courses here on babypips, and after seeing the great spirit of help of the community here, i grew fond of the idea of having a mentor, someone who has enough experience to guide me through this journey, and given how much i appreciated your last straightforward advice, i was wondering if we could continue on this basis, any advice, guidelines to follow you give would be highly appreciated!
Thanks man!
I’ll stick to the main core of what I advised a few posts back.
Contrary to what you’ll hear & read there really isn’t a whole lot to cogitate over when you strip it back to basics.
The objective is to make life as effortless as possible when bringing into play a structured & consistently applied game plan based around repetitive, high probability opportunities.
If you’ve searched my post history then you’ll see where the vast majority of those contributions live. The guts of what I advised is all in that thread & complimented by industry colleagues & like-minded individuals who share those simple, effective & very efficient concepts.
Give it a whirl if you’re interested. It’s one of the more relaxed & informal hang outs with a mish mash of content in there, but if you’re curious about digging a little deeper into what I touched on here, then knock yourself out.
i completely agree
but the catch 22 of it is… (and i think we can agree on this as well is )
Long time frames are better for psychology when starting out and is important for developing strategy and confidence
however, Not everyone has enough money when starting out to safely trade a Monthly chart,
and that’s the trade off isn’t it
You have to find a long term chart that is not so long so that one normal move in the wrong direction takes out your account
i find this is how people usually determine their time frame to a large degree (not completely, but… to a large degree… yes)