Support and resistance..( help pls)

C

cashmoney69

I bought the book

Japanese Candlestick Charting - Second Edition

and i'm having a hard time understanding support and resistance lines and where to draw them... the lines seem so random,

can anyone offer me some insight on better understanding this stuff... thx for all posts.
 
Quote from cashmoney69:

I bought the book

Japanese Candlestick Charting - Second Edition

and i'm having a hard time understanding support and resistance lines and where to draw them... the lines seem so random,

can anyone offer me some insight on better understanding this stuff... thx for all posts.
More...

It will be easy to help you if you post a chart of what your trying to determine s/r levels or trendlines if you post some charts of the trading instrument (make sure you show or state the chart interval).

Without those charts...you'll continue to have a hard time in understanding.

Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
 
Quote from cashmoney69:

I bought the book

Japanese Candlestick Charting - Second Edition

and i'm having a hard time understanding support and resistance lines and where to draw them... the lines seem so random,

can anyone offer me some insight on better understanding this stuff... thx for all posts.
More...

Support and resistance is an art form and has to do with a lot of stuff. I use software to detect levels of support and resistance because for me it would take too long to try to just randomly watch things.
http://www.trade-ideas.com/Help.html#CAR
In my opinion it is better to detect these levels algorithmically then just with the eyes.
 
18 is where the resistance is. 16.85 is where support is.
If you looking to always have the same exact touching points, that doesn't happen often. Why? Some are standing down there waiting for 16.85, while others jump in line in front of them at 16.89. The stock can run up, and not come back down to that bottom support level. You could say the ones buying at 16.89 are less risk averse, while the 16.85ers feel strongly the price will come down for them and won't give a penny more. They may miss the trade, but that's the way it goes.
 
Cashmoney,

I have attached what I would see as support and resistance levels. As stated by earlier posters, drawing and finding support and resistance is an artform and not an exact science. That is why you can see in the attached chart that I use support and resistance zones. Don't forget that old support becomes new resistance and vice-versa. Also, I have found that Pivot Points work very well, and much easier to find since it is a mathematical formula. Hope this helps.


-Trader273
 

Attachments

Quote from cashmoney69:

I bought the book

Japanese Candlestick Charting - Second Edition

and i'm having a hard time understanding support and resistance lines and where to draw them... the lines seem so random,

can anyone offer me some insight on better understanding this stuff... thx for all posts.
More...

Hi cashmoney,

Be careful about getting normal s/r level discussion confused with what Nison explains in his book as s/r levels based upon Japanese Candlestick analysis.

That could be why your confused because you may already have your own interpretation of what s/r levels are and see that Nison is talking about the merits of such via specific candlestick patterns.

In the advance candlestick s/r level stuff your no longer dependent upon the flaws of drawing trendlines...

You'll be learning about s/r zones via WRB Analysis which is a topic Nison doesn't teach but I discuss it in-depth here at EliteTrader.com and you can use ET search menu to find all the information you want about it.

http://www.elitetrader.com/vb/search.php?s=

Yet, I'm a futures trader and WRB Analysis is more suitable for futures, derivatives, currencies than stocks and is one reason out of many why I don't discuss specific stock patterns.

I also talk about WRB Analysis via index charts...send me a pm if you still need help with Nison's interpretation of candlestick s/r levels or s/r zones which is something he doesn't discuss in his books.

WRB Analysis = Wide Range Body Analysis

There's also another aspect of s/r zones based upon candlesticks via the Long Shadows.

Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
 
Trader273

ok, so is it safe to say that:

the support line is when the prices hit their lows (bullish signal to buy)

and resistance is when prices hit their highs (bearish signal to sell)

and that green "minor" line is the median price for the stock being traded for that time frame...in that case, it was a daily chart

----------

NihabaAshi

did you trade stocks before futures and also do you have a background in economics or something?

as far as S / R goes.. do most brokers offer free software to spot support and resistance or is it something that I'm going to have to learn mentally?.. not that its a problem, I just dont want to waste my time if its not necessary

thx guys :)
 
Quote from cashmoney69:

cisco (csco) 3 months
More...

=================
cashmo;
1] S& R are approximate, not exact.

2] You are handicapping -hurting your TA by looking at only 3 month charts;
CSCO is mostly in sideways/slop/chop trend. Try 6-12 months charts also .

3]18.5 area=resistance also ,tek seasonals may uptrend it;
but would pass on a short or long position, myself, based on 6-12 month charts.
Compare to GOOG & QQQQ;
CSCO = not good down trend or uptrend its an underperformer, slop/chop:cool:

Good question, keep looking.
 
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