Support and Resistance Levels

dbphoenix
Elite Member

Registered: Sep 2002
Posts: 4243


04-16-04 10:33 AM

Determine those levels at which the stock has found support or resistance in the past.
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What historic timeframe do you use ?
 
Depends on the bar interval. There's no reason to go back months if you're trading a 5m bar. Plus highs and lows that are evident on intraday charts may not even appear on daily charts.
 
These are probably the most common formulas:

  • [Formula 1] (H+L+C)/3=P
  • [2] (2)(P)-L=R1
  • [3] (2)(P)-H=S1
  • [4] (P-S1)+R1=R2
  • [5] P-(R1-S1)=S2



  • P=Pivot___ R1=Resistance Level 1
  • H=High(previous day)___ S1=Support Level 1
  • L=Low (previous day)___ R2=Resistance Level 2
  • C=Close (previous day)___ S2=Support Level 2
 
If it's pivot levels you're interested in, there are two threads under Trading. Just do a Search using "pivot". However, the pivots do not necessarily provide S/R.
 
Quote from libertad:

On a scale from 1 to 10....how important are S/R levels in your trading?

Thank you for your responses....
More...

On a scale from 1 to 10....how important are S/R levels in your testing?
 
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