Hello,
I have programmed indicator which shows Support/Resistance levels very exactly. I will post here my analysis for Euro.
Regards,
Analyst
[B]Support / Resistance Levels
Introduction[/B]
Support and Resistance levels are probably the most popular method of financial markets analysis and decision-making instrument.
If identified correctly, support and resistance levels allows trader to minimize loss and maximize profit.
There are many methods of calculating support/resistance lines.
Perhaps most popular is to consider previous high as resistance and previous low as support. Contrary method also exists - previous high as support, previous low as resistance (if market has strong trend).
Fibo levels and Gann lines are other popular methods.
While observing markets and working with various mathematical methods I discovered very different method to calculate support and resistance levels. These levels depends not only of absolute high or low (as classical method or Fibonacci), but also depends of trend slope, trend duration and trend patterns (expecially important how tops and lows are formed).
Let’s look at examples
Analyst
Euro March 2012
This year’s Euro history is good example how effectively works support / resistance lines.
First let’s look at Euro March chart. You see orange green line around 1.3390 level. This level was calculated from February 29 - first part of March downtrend. If you check Fibo, you will not find any level exactly at March 27 and April 2nd Highs. But according to my method, highs were catch almost pip-to-pip !
You can also notice that low between double (March 29) was just 15 pip below orange and blue support lines.
Analyst
Euro April 2012
Euro downtrend at first half of April generates new resistance lines around 1.3270 (as I mentioned earlier, Support/Resistance lines are calculated dynamically from both price and time, not price alone)
When rising Euro mets these lines, it was rejected from these levels. Multiply tops were formed. After 4 tops were formed, Euro was forced down, meeting dash blue line support (marked by arrow). After breaking this line, Euro met new support at dotted blue line.
After breaking dotted blue line, Euro falled more than 800 pip.
Analyst
Now let’s look to recent Euro situaction. The screenshot below is made on August 7th.
Orange lines - resistance levels, calculated from Daily timeframe (levels in earlier examples were also calculated from daily timeframe)
Resistance line reject price at very exact level. Every line was hit twice, so forming double top formations.
Analyst
Euro August 9th
As I expect, Euro declined down.
I sold 3 positions (two of them are seen at chart, last position add a little bit later).
I close positions with 63/87/89 pips of profit.
Today I did analysis at 240 min timeframe (calculating timeframe)
Euro was approching double support line. As Euro began to rise from support line, I went long.
First target is support line at 1.2325 (now it probably become resistance). If price will reach this line, I will take part of profits there.
Analyst
Warning:
All examples are for information purposes only.
They are not buy or sell recommendations.
As Euro was rejected from 1.2325 level, I closed all positions with several pips of profit.
Are the levels calculated from the highs and lows?
Why do you prefer to have your levels drawn automatically? I ask because I found some similar indicators in the past and there were times when there were too many lines on my chart.
Hi FringFX,
Levels calculated not only from highs and lows, but also from price trends which precedes and follows these highs or lows. I prefer lines drawn automatically because of two reasons:
- My algorithm to calculate S/R levels is more complicated as for many other S/R indicators, so this indicators saves many time for me.
- Automatically calculated S/R levels are more objective.
If trader draw levels manually, it could be easily be biased psychologically: if trader expects market go down, he finds resistance levels more easily and ignores support levels (if expects market to go up - contrary)
Markets does not care about our thoughts and feelings. So I prefer computer program to do some tasks as program has no psychologically bias - it is more objective.
Analyst
would you mind sharing this indicator?
Below is Euro Friday graph which I published ealier in my www:
Today (Friday) I did Euro analysis with slightly modified parameters. Below is euro graph:
Next article:
As Euro rised stronly I did not wait price to test daily support again. I went long at 1.2295
I expect price to reach 1.2360/70 (Resistance line - seen in previous post).
Today’s situation:
Euro retraced exactly to daily tf Resistance Level. This example demonstrates program’s advantage against emotional mind: I would get about 30 pip better price, if I would wait for test.
Why I entered long too early ? Because I was afraid to miss oppurtunity.
However markets gives so many oppurtunities for traders. But we miss these oppurtunities because ours minds are very subjective.
I am still long in market. But I trade on server where I could not run all of my indicators. Below my postions are seen:
I will look at current situation and maybe I will close them if market will give bearish price formations.
Also I lowered profit for one position from 1.2360 to 1.2340 as I expect some resistance there.
Analyst
Just several minutes after I sent previous, price touched 1.2340. One position was closed with 45 pip profit.
Another position is still opened with tarked 1.2360
I will look situation and maybe will close this position earlier.
Happy trading,
Analyst
Euro S/R levels Weekly
I want to expand Euro S/R analysis up to weekly timeframe.
Weekly S/R lines are reached quit rarely. However they are critically important for investors and long-term traders.
Weekly levels also could add valuable information for short-term and intraday traders.
Below it is Euro graph with auto-calculated S/R levels on Weekly timeframe. About third of large price swings are around these levels.
Euro is rising steadily for five weeks.
Every traders asks for itself:
How long this advance will continue ? Should I be bullish or it is time to become bearish ?
Let’s look to Euro using Support/Resistance levels.
Currently Euro reached S/R levels , calculated on weekly timeframe.
Therefore I think Euro behaviour will change in coming days.
Mostly probable that Euro will make consolidation area between higher level at 1.2964 and lower level at 1.2825. However short term break up to 1.3 is possible. I think for some time best strategy is to sell highs and buy lows.
Happy trading,
Analyst
Are you trying to sell an indicator??
Haha sorry bro - but that part is funny 
After visiting his site … it looks like it