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How to draw support & resistance line


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Hi

 

Currently, I using the pivot point for my R&S(support & resistance).

 

Is there any better way or method to accurate draw my R&S line on my

hourly, 4hour and daily chart ?

 

I just want to perfect my skill in one of the factors that give higher probability

to my winning rate.

 

Thank you.

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Re: How to accurately draw support & resistance line ???

 

Hi

 

Currently, I using the pivot point for my R&S(support & resistance).

 

Is there any better way or method to accurate draw my R&S line on my

hourly, 4hour and daily chart ?

 

I just want to perfect my skill in one of the factors that give higher probability

to my winning rate.

 

Thank you.

 

--- read the rules. you have just broken one. mod ---

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  • 3 weeks later...

Re: How to accurately draw support & resistance line ???

 

Hi..

Actually there are several type of Support Resistance. Static and Dynamic.

Static an be drawn with straight Horizontal by examine the whole price in Multi Time Frame. And the Dynamic can be drawn by using Pivot, Fibonacci, or Indicators (ex: Bollinger Bands, Moving Average, or even Specific Moving Support Resistance custom Indicator)

 

Which one is the better one? All is good and depend on your trading strategy. It also good to combine them. Shorter time frame for short term trading should use the dynamic SR.

I will explain more in static SR which I always used in my trading.

 

In my experience, Static SR usually happend from the past price level and will repeat in the future. For example:

 

http://i624.photobucket.com/albums/tt329/adriansusianto/h1.gif

 

Bold Lines are Major/Strong SR Lines, which bigger probability that price will retrace or breakout those lines.

Thin lines are minor SR Lines, which it still on the test to be the strong SR Lines.

 

How did I draw those lines?

Use all your Time Frames, Monthly, Weekly, Daily, H4, and H1

1. look at your Monthly Chart, find the point where price were bounced. Draw the lines at the rounded price (ex: 1.3500, 1.4100)

2. Change to Weekly Chart, do the same thing with step 1, but also do the fine tune the lines you have drwn from step 1

3. Change to Daily Chart. Examine all lines you have drawn and test them with past data. The valid lines should be the valid for all price movement in the past until current.

4. Change to H4. do the same thing with above steps, but now fine tune to something like 1.3250, 1.4120. Add more lines if you think the price were bounce off.

5. Change to H1, do the same thing like step 4.

6. You have your static SR lines.

 

For suppose in the present time you find a new lines, mark them with thin line and test those lines by examine each price movements everyday until you are satisfied and sure enough that the lines is a good SR Lines.

You will find that the lines you have drawn is also agreed by Fibonacci 38.2, 50, and 68.1. The more lines agreed by Fibonacci, the stronger the SR Lines.

 

Yes, I am live trading with my SR lines. But I treat them to be my "the guardian" lines. In my EURUSD above you will find that 1.4000, 1.3300 are very strong SR Lines. I got many profits from those lines. At the moment, EURUSD are still playing around 1.4000.

By this special double or triple 0, you can also apply Kathy Lien's OO strategy.

 

Hope these can answer your questions.

 

PS: Bro dvd, since now we can write in English almost in every room, I think this topic should be removed elsewhere related to trading system, not in English topic anymore. Because most of us are now writing English. :D

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Re: How to accurately draw support & resistance line ???

 

Thanks Adrian for a clear explanation of static S&R.

Where can learn more about the dynamic S&R.

 

Thanks

 

Hi Tigris,

Dynamic S&R can be identified using:

- Price Action from Candlestic Chart : rever to Steve Nison Books about Candlestick

- Pivot Point Calculation

- Fibonacci Retracement

- Indicator: Moving Average (EMA 10), and several Custom Indi (Forgot the name, coz I don't use them)

 

Thx..

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Re: How to accurately draw support & resistance line ???

 

I have found good success with Fibonacci retracements combined with daily pivots. Also if you use bollingbands combined with the fibonacci numbers many times a turning point will coincide when the two meet. Hope this helps.

 

good luck

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How to draw trendlines

 

I have been looking for advice on how to draw properly trendlines.

What is 'normally' taken? High/Low or Close?

 

How 'sharp' would you normally draw the line, what delat would you allow it to brake and reverse to still count the line as 'valid'?

Hey as usual any advice is appreciated!

EGI1610

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Re: How to draw trendlines

 

read Thomas DeMark - The New Science Of Technical Analysis chapter 1

 

http://rapidshare.com/files/270797282/Demark_-_The_New_Science_of_Technical_Analysis.rar

 

not an easy read but worth it.

 

Summary:

 

identify swing points.

Swing High = A bar preceded and succeeded by lower highs.

Swing Low = A bar preceded and succeeded by higher lows.

 

To draw a downwards trendline, find the latest swing high on 15m or 1H chart. Draw line backwards from this to the swing high before it (has to be higher can't go sideways or downwards). reverse for and uprend.

 

When a new swing high is made then update your dynamic trendline. Angle is important. Too steep then it's not as reliable.

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Re: How to draw trendlines

 

I have been looking for advice on how to draw properly trendlines.

What is 'normally' taken? High/Low or Close?

 

How 'sharp' would you normally draw the line, what delat would you allow it to brake and reverse to still count the line as 'valid'?

Hey as usual any advice is appreciated!

EGI1610

 

 

Here are two ebooks that explain how to draw trendlines and trendfans, very simply and easily.

 

you should be able to draw them after reading.

 

http://[email protected]/file/115734332/4faecae3/Trend_and_Trendlines.html

 

regards

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  • 2 weeks later...

Re: How to draw trendlines

 

I have been looking for advice on how to draw properly trendlines.

What is 'normally' taken? High/Low or Close?

 

How 'sharp' would you normally draw the line, what delat would you allow it to brake and reverse to still count the line as 'valid'?

Hey as usual any advice is appreciated!

EGI1610

 

 

hello egi1610

 

try to use this indicator, maybe it can help u

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Re: How to accurately draw support & resistance line ???

 

i like to think of Price patterns as strategicaly drawn trendlines around Support and Resistance.

 

- 1st draw your support and resistance levels on the chart

- then draw trendlines

- when trendlines intersect with support and resistance a pattern may or maynot form.

- this gives clues to potential target and or

new support and resistance.

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Re: How to accurately draw support & resistance line ???

 

This is a good topic. I think something like that should be included in beginners discussion as well. Support & resistance line as well as observing trends, I think that form the basis of technical analysis. Pivot points are also good indicators that I use in my daily trading.

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