Sup/Res Lines

[juicyt]

http://www.forexfactory.com/showthread.php?t=267607

 

Any smart egg here able to figure out and explain how this guy gets his lines? Someone tried to explain but i didn't get it.

 

Thanks all

[soundfx]

juicyt,

 

I've not looked at this thread in any detail, however...

 

A very interesting exercise is to look back through monthly, weekly and daily charts and plot obvious support and resistance areas - actually put those lines on your chart. Now look several weeks, months or even years later and see how price reacts at these levels.

 

I've been day trading every day and several months ago put various S/R levels on my chart for EURUSD and never bothered plotting actual lines for S/R levels since then. I'm finding recently as price is going back into those same levels that it's reacting quite impressively !

 

This may not be the secret of this guy's levels, though it's worth thinking about :)

[Freddie]

http://www.forexfactory.com/showthread.php?t=267607 Any smart egg here able to figure out and explain how this guy gets his lines? Someone tried to explain but i didn't get it. Thanks all

 

They could be anything Juicyt: I did what soundfx suggested but only scored two lines on the 4h chart that the vendor shows.

 

What else could they be? Fibs, daily, weekly and monthly pivots. Don't know that many of those things carry on for the longer term. You don't get people saying "Ah yes it is approaching the 67.3% retracement of the June big move!!"

 

Forgot to mention Murrey Maths, Camarila(sp).

Edited January 22, 2011 by Freddie

[sillykiddo]

Hi guys

I have been following this line for this one month..

and guess what this lines are amazing. I'm not promoting anything here.. i want it reversed engineered .. this is a paid server 20 pound a month . I know its nothing .. i can join but i dont want to be dependent

I am sure here in indo there is some smart guys here who can figure this out.

 

lets try to draw their attention here...

 

thanks

 

NOTE: I used this level in live account and i did made good pips

[Freddie]

... I'm not promoting anything here.. i want it reversed engineered ..

 

Good idea Kiddo, have you compared any other 'lines'. Just remembered 'DiNapoli'

 

So, where's all those clever ones who come up with "Oh, that looks like X lines" we are waiting for you!!! First prize... lots of kudos!!

[alansim]

NOTE: I used this level in live account and i did made good pips

 

I guess you have made 10 pips so far ?? :D

 

Just kidding. So care to share per day on average how many pips you netted ?

[gege.aig]

http://i53.tinypic.com/2r6e1z5.gif

 

curious how the calculation of the line.

Edited January 22, 2011 by gege.aig

[soundfx]

Hi Guys,

 

I like puzzles lol, so had a look at this one in more depth.

 

I'm getting the numbers to be pretty close, though not exactly the same.

 

Level 0 as has been explained is shown by the dotted lines and is simply the open price at the start of a new week or month.

 

If you look at the differences between each of the other levels from that 0 level, you'll find that they're the same for - and + levels. Here's the differences for the + levels:

 

We'll call the difference X.

 

levels 0 -> 1 = X

levels 1 -> 2 = X

levels 2 -> 3 = Appears to be X * 1.6 (or very close to 1.6)

levels 3 -> 4 = X

 

I believe that the differences are based on the difference between the High and Low of the previous month's or week's candle, and if the Open price at the start of the new week/month ends up being a High or Low then that is used in the calculation.

 

Multiplying the (High-Low) difference by 0.274 appears to give reasonably accurate values of X which can then be used as above to calculate the levels.

 

These levels are supposedly created by mathematical calculations and have nothing to do with pivots, fibs, price action S/R etc.

 

I suspect that rather than using 1.6 as a constant for the level 3 and -3, we should probably be using 1.618 as this is connected to the golden mean/golden section etc.

 

0.274 as the start of some decimal constant seems vaguely familiar to me too, though I'm not sure what this could relate to. This is the key because it determines the first level and if those numbers are correct, then the rest should be easy to calculate. My levels could be slightly different to theirs because of broker price differences - it's hard to say.

 

Here are their level 1 values for the end of the first week in Jan:

 

EURUSD: 1.3048

GBPUSD: 1.5603

EURJPY: 108.11

USDJPY: 83.87

USDCHF: 0.9793

USDCAD: 0.9968

 

Here are mine:

 

EURUSD: 1.3042

GBPUSD: 1.5603

EURJPY: 108.11

USDJPY: 83.85

USDCHF: 0.9790

USDCAD: 0.9969

 

I hope this helps !

[juicyt]

Oh my lord, now I have to start a thread asking for someone to explain your calculations from start to end on a chart....

 

I'm only joking about that (kind of) but good job and I think you are right, the differences I'd imagine would be brokerage differences in closing/opening prices. I'll have to go through it and see how it all adds up (a little later today) but until I do that, do you think there is any way to make an indicator that someone could drag and drop on a chart and it would place the lines based off those calculations? I know doing 5 or 10mins work a week isn't asking to much, but if people want ot try it on differrent charts/pairs, then that would save a bit of time in that case. Also I guess it might be good for a visual back test.

 

Once again, good job and I'll go over it in detail a little later.

 

Juicyt

[Freddie]

I can only re-iterate what Juicyt said. Excellent job SoundFX.

Did notice that the lines on the chart were regular in that there were large spaces followed by two lots of small spaces. I have the chart downloaded to find the spacial differences when I get time.

[soundfx]

Guys,

 

Creating an indicator should be pretty straightforward, I may have a go myself unless someone beats me to it :)

[Freddie]

Guys, Creating an indicator should be pretty straightforward, I may have a go myself unless someone beats me to it :)

 

That would be good because next week is the last week of free lines!!

 

16 hours ago the following was posted on the FF thread

 

" FREE FMRL Number for week 24-28 January 2011 You will be able to get next week's free numbers HERE. They will be posted within 90 minutes of market open.

This is the last week FNRL will be freely available here."

 

Next was the advert for their service.

[sillykiddo]

soundfx you are a legend man yes i can make an indicator.. if i know the calculation right. ur calcualtion are same as theirs 3/5 pips diff is nothing.. there will be always a difference...

 

soundfx if u care to pm me or share the formula here i'll make an indicator.. and share here

 

cheers

[soundfx]

Hi sillykiddo,

 

Thanks for the offer. The formula was in my other post, however here it is in more detail:

 

Monthly Lines are calculated in the same way as Weekly:

pMonthHigh = iHigh(NULL,PERIOD_MN1,1)

pMonthLow = iLow(NULL,PERIOD_MN1,1)

MonthOpen = iOpen(NULL,PERIOD_MN1,0)

 

If MonthOpen > pMonthHigh, then pMonthHigh = MonthOpen

If MonthOpen < pMonthLow, then pMonthLow = MonthOpen

 

X = (pMonthHigh - pMonthLow) * 0.247

 

Level0 = MonthOpen

Level1 = MonthOpen + X

Level2 = Level 1 + X

Level3 = Level 2 + 1.618*X

Level4 = Level 3 + X

Level-1 = MonthOpen - X

Level-2 = Level-1 - X

Level-3 = Level-2 - 1.618*X

Level-4 = Level-3 - X

 

You can crib the code to draw the lines from something like the SDX-SweetSpots indicator.

 

So that they look like the original...

 

Level 0 is a dotted line for Monthly and Weekly

Other Monthly levels are solid blue lines

Other Weekly levels are solid green lines

 

It may be worth having the 0.247 and 1.618 constants as external parameters so that we can change these slightly if required.

Edited January 23, 2011 by soundfx

[chrisbenjy]

Hi sillykiddo,

 

Thanks for the offer. The formula was in my other post, however here it is in more detail:

 

Monthly Lines are calculated in the same way as Weekly:

pMonthHigh = iHigh(NULL,PERIOD_M1,1)

pMonthLow = iLow(NULL,PERIOD_M1,1)

MonthOpen = iOpen(NULL,PERIOD_M1,0)

 

SoundFX, Isn't PERIOD_M1 1 minute tf? I think monthly is PERIOD_MN1.

[soundfx]

Oops - you're quite right chrisbenjy - I'll change it :)

[iwjw]

A thing that I don't quite understand:

If MonthOpen > pMonthHigh, then pMonthHigh = MonthOpen

If MonthOpen < pMonthLow, then pMonthLow = MonthOpen

 

The only way I see that the open of the current month is higher than the high of the previous month is when a new month starts on a weekend and opens with an up gap....(or with a down gap making the open lower than prev. month low)

do I miss something here, or is it just that?

[sillykiddo]

thanks soundfs

 

i'll put it in indicator it should be that hard.

[soundfx]

iwjw,

 

You're exactly right...this is just to cater for the relatively rare occasions where we can have significant gaps over the weekend. In this case, I have been getting numbers closer to the original ones when I use the Open for the new Week/Month rather than the previous close. This may not be strictly required, however I think that if the Open has exceeded the previous High/Low then this is a significant move and should be included in our new line levels.

[iwjw]

iwjw,

 

You're exactly right...this is just to cater for the relatively rare occasions where we can have significant gaps over the weekend. In this case, I have been getting numbers closer to the original ones when I use the Open for the new Week/Month rather than the previous close. This may not be strictly required, however I think that if the Open has exceeded the previous High/Low then this is a significant move and should be included in our new line levels.

 

They are using 23:00 GMT as market open on Sunday

So one would have to use a broker that opens no later than 23:00

[soundfx]

iwjw (and sillykiddo),

 

It's probably worth us adding another parameter "HandleGap" set to true or false which will allow you to use the indicator from the previous month/week high/low if your broker opens later than 23:00 GMT.

[freddy]

They are using 23:00 GMT as market open on Sunday

So one would have to use a broker that opens no later than 23:00

 

iwjw (and sillykiddo),

 

It's probably worth us adding another parameter "HandleGap" set to true or false which will allow you to use the indicator from the previous month/week high/low if your broker opens later than 23:00 GMT.

 

 

 

Great job you are doing both of you, but if I understand correctly they use Sunday's open at 22:00GMT, not 23:00GMT, am I correct?

look at this excerpt:

 

http://www.forexfactory.com/showthread.php?t=267607&page=14

Post#208

 

--------------

 

We publish our FMRL numbers a month and a week in advance.

 

Monthly numbers within the first 90 minutes of the first day of the month.

 

Weekly numbers within 90 minutes of the week's market open.

 

Currently that means by 23:30 GMT on Sunday.

 

We do not currently publish daily numbers.

 

-----------[/Quote]

[soundfx]

Hi freddy,

 

Yes, the market open should be at 22:00 GMT. All we're trying to do is use the open in our calculations if it forms a new high or low. However, with the suggested parameter, we have the option of leaving this to false anyway and just calculating the lines from the previous candle.

 

I think what iwjw is getting at is that if your broker opens late - for example at 00:00 GMT rather than at true Aussie open on a Sunday, then when your broker opens, price will have moved away from the true market open at 22:00 GMT.

 

In reality, I don't see that using the open rather than previous close will have much effect on the lines in most weeks and months. However if on a rare occasion that the previous month closed on a Low for the month and then gapped down 100 pips at the open of the new month, then it makes more sense to use the open value in calculations because this represents the High-Low range of the previous month more accurately.

[iwjw]

Great job you are doing both of you, but if I understand correctly they use Sunday's open at 22:00GMT, not 23:00GMT, am I correct?

look at this excerpt:

 

little bit confusing

that's what I got from the link for the new week:

 

The FMRL numbers will appear here within 90 minutes

 

of market open at 2300 GMT on Sunday 23 Jaunary 2011.

 

Thank you!

[freddy]

Ok, thanks Soundfx, that makes sense!

 

also on a side note, I just received an email

 

 

Hi Fred

 

A belated happy new year to you!

 

I've just finished writing a short eBook on the subject of MQL4 objects that you might like to take a look at. There's also a tutorial on how to build a very simple but useful indicator. I wrote the first version of the indicator 3 years ago and I still use it today. It's an invaluable addition to any Forex traders arsenal.

 

There's no cost and you are more than welcome to download it and give it to your friends or whatever else you'd like to do.

 

You can download it here: http://www.automatedtradingsoftware.com/blog/ea-programming/327

 

Hope you enjoy it.

 

Kind Regards

 

Steve

[/Quote]

 

 

Apart the interest of learning about MQL4 coding, I post it here, because the useful indicator he is talking about might be used in strategies like the one discussed here.

 

For lasy people who don't want to "type" the code, here it is:

http://www.multiupload.com/VQ6PFE1F61[/Code]