Support and Resistance Volume Indicator Needed

[elvee4eva]

Hi,

 

If you have trading forex for a while, then you must have heard the saying, "Buy the Dips at support levels in up trends and Sell the Rallies at resistance levels in down trends.

 

The problem is this, How do you know that a support or resistance level is strong enough to hold retracing price action, and help force the retracement or pull back to continue in the initial direction of the prevailing trend.

 

Fx courses like How to trade with support and resistance by Vic Noble and Low Risk High Reward Trading by Jarrat Davis talk about concepts like, waiting for price to pull back or retrace to a confluence level of support or resistance where a fractal level, a pivot level and a fib level all occur at the same price or are very near to each other i.e not more than 15 pips apart.

 

I have tried this concept on both the 5 mins, 15 mins, 1 hour and 4 hour time frames and the results have been inconsistent at best.

 

My suggestion is this,

 

We need to develop an indicator that will show us exactly how strong a support or resistance level is.

 

This indicator must be able to show us the amount of buy orders at each support or fractal level (swing low) and the

the amount of sell orders at each resistance fractal level (swing high) on multi timeframes.

 

Secondly, we need an indicator that we show us the number of buyers and sellers at every price level.

 

If we have these 2 indicators, then it will be very easy to know for sure if a price level can comfortably act as a reliable support or resistance level.

 

Let's assume that we are in an down trend and we are presently experiencing a pull back or retracement, we then observe that the next resistance level is at 0.9912 and shows resistance volume as 320. we wait for price to get to about 10 or 15 pips near the resistance level of 0.9912, we then check our buyer seller volume. If the number of buyers is 150 or 200, then it is quite lower than the resistance level meaning that the resistance level is a lot stronger than the pull back and this automatically means that when price finally reaches the resistance level, if will be rejected and this will cause the market price to bounce off that resistance level and return back to its original downwards direction. With this knowledge, it will be easy to know which support or resistance levels will hold and which levels will be broken.

 

If we can create this indicator, we will all be rich.

 

If you can code this, then help, if you can't, then help me spread this post to other forums that can help us code this

indicator.

 

Thanks in Advance

 

Elvis

Edited June 2, 2010 by elvee4eva

[4xinvestor]

who is going to provide this 'buyers & sellers' data in a decentralized forex market?

[elvee4eva]

Hi 4xinvestor,

 

This indicator can be designed to pick the buyers sellers data from each traders broker, since the price feed comes from the broker.

 

Elvis

[jjames]

SImple solution is volume got this from 1 of prings books.

 

-Example lets say the trend is up volume is decreasing according the trend but when you see price close to a ressistance point and you see unuseal volume (increasing) then better put your sell order in.

-Another thing is law of motion( when price is moving fast up close to ressistance then ther most be a lot of power (sellorders ther to stop it so the momentum combined with volume will tell you and keep you out false breakouts.

 

I dont say i am a expert but i think this a good thing to keep a eye on

[Hakim314]

@4xinvestor - its easy to get, You just need to take datas from futures.

And I see that thread has died :(

And If You dont believe in mirroring, look how PowerLevels acts. YOU WILL BE surprised !

[f451]

Hakim

 

Can you explain a little more about mirroring and power levels?

Also, which broker do you get your futures feed from?

 

cheers

f451

[Hakim314]

Look PowerLevels Thread here on this forum, even if You dont get it free from c0py, it costs only 80bucks / year for daily PL.

These are the MOST PRECISE TO THE PIP support / resistance levels in the world (!!!) based on options traded on US stock markets. YES IT HAS REFLECTION !! and no st*upid donkey will tell me that it doesnt work cause I observe it every day. And I even found some other clues for probably predicting market move BASED ON PL. But it's just observation and I must confirm it.

 

Take futures contracts, build a Volume histogram and compare it with spot. This is the clue. You will know then why, where, when incl. tops / bottoms with MUCH MORE HIGHER probability then now.