What Would You Consider Major Support and Resistance

Hello all -

I would like to know what you would consider major support and resistance.

1. Would it be where a pair has hit the same price more than twice within a 24 to 48 hour period ? or does it have to be over a longer period of time?


2. Would it be where a pair hits the same price more than twice on one time frame? eg. 15 min. chart it hits the price two or more times.

3. Would it be where it the same price more than twice on multiple time frames? eg. 5 min, 15, min, 1 hr and 4 hr charts.

4. Would MAJOR support and resistance have to hit the same price more than 2 X's, 3 X's, 5 X's, 7 X's etc. etc. over what period of time?

Now that you have answered what Major support and resistance is can you explain what MINOR support and resistance is.

Knowing Minor and Major Support and Resistances would you still trade in the current direction if you were coming up to a minor support or resistance ?

Obviously we wouldn't want to enter a trade if we knew we were coming up to a Major Support or Resistance right? or would we?

Just wanted to know everyone elses thoughts on this subject.

BTW this is how I look at Support and Resistance.

Major Support would be if a pair hits a certain price more than 3 times on all of the time frames, not just one time frame but multiple timeframes. Over a period of time I usally go as for bak as 5 - 6 years.

Minor Support and Resistance would be within the last 24 - 48 hours on a single time frame like a 15 min, 30 min, 1 hr. timeframe.

Let me know if you think I am wrong. I am willing to learn and definately open to any suggesstions.

Thanks for helping out

Wishfulpiping

Hi,

Which timeframe are you analysing?

In shorter TF like 15 M you can clearly notice minor (intraday) supports or resistances by reading the candles. Usually price needs to be tested 3 - 4 times before break out. However these minor S/R only work out for short time (less than a day).

In larger TF we need to use trendlines to help recognizing the support/resistance pattern. Also in daily TF for eg, if we have two candles touched a certain price and rebound, that's a good sign of possible S/R. If you draw a trendline over the candle's tips slope you will also notice some pattern of S/R.

Knowing Minor and Major Support and Resistances would you still trade in the current direction if you were coming up to a minor support or resistance ?

Obviously we wouldn't want to enter a trade if we knew we were coming up to a Major Support or Resistance right? or would we?

You are asking mechanical questions, the answer is all depends on your strategy. There are many ways to utilize S/R in your system. For eg. some traders put their targets or stop losses on nearest support and resistance. Some wait until a candle form above/below S/R then enter on fibo retracement level.

Some even use the fibonacci extension to predict the next level of S/R.

Those types of S/R (using price hit, fibo, or trendlines) are quite subjective by nature, they depend on how we draw them. Ask 10 traders and you might get 10 different perspectives.

The TRUE S/R though, is when you heard the 10 years HH or LL, etc. EUR/USD for eg is currently on its peak after breaking previous HH.

major support and resistance you must keep your trading clean easy to
manage. i have known a lot of support and resistance traders and i have
seen there charts. support and resistance levels become psychological
barriers more then they are helpful to traders. especially when the trader
plotting support and Resistance on there chart is confusing themselves
with 50 lines on the charts trying to decide which level will give them the
most benefit in the future.. do not feel bad long ago i was just like everyone else.

now to solve the problem... first i have templates build with historical support
and resistance lines. i get the lines from 30 years of back history. i only use
the closes from every year back thirty years. this plots 30 lines on my chart.
but it is a monthly chart so by the time you get to the four hour chart you
may see only one or two lines.

support and resistance rules

1. long consolidations at one nearby line when the break happens disregard
the next closest line except maybe a quick pullback. when the trade breakout is 8x1 angle. or 4 x1 angle 70 to 80%.

2. 1x1 or 45 degree breakout expect the next line to hold as reflective test of the breakout, and probability high to climb back into the range.

I only use gbpusd to trade support and resistance, because this pair is more disciplined with their levels. and I use the 15m timeframe to determine support and resistance levels. If using a larger time frame, many levels unreadable.


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long candlestick formula

Doesn't have to be.

Doesn't have to be as well.

Price mentioned is static in most of the cases, which means that when hit, it's hit on all possible time frames. You can't have the same price being hit once on 5 min charts while being hit twice on 15 min charts!!! Not logical.

Unless you are talking about bars or candles hitting the mentioned price several times, that's another thing and your statement becomes valid.

Not a specific hard rule, it depends.

In my opinion and based on my experience, and this is backed by the concepts behind support and resistance in the first place, major support or resistance are the areas where large amounts of volume are willing to get executed, regardless the fact if they really get executed or not. These are the areas where imbalance occurs between bulls and bears. It really doesn't have to be hit once, twice or 3 times, though it can be one.

Major support and resistance areas are usually long term areas monitored by major and big players. If we take a rough example, let's assume that a certain big bank, ABC is having a large long position in EUR/USD. Traders in that bank are actually willing to cut this big position by half and book profits if the EUR/USD approaches 1.4000. This case creates a resistance area around 1.4000. The boundaries of the area will depend on how large is the required position and how volatile the EUR/USD will be when it approaches this level. The resistance area can be 1.3950-1.4100 and can be as tight as 1.3980-1.4015, all depending on volatility, expected news and developments and available volumes at such level.

The 1.4000 could have been hit before once, twice, three times, or even never hit before at all (refer to gold recently at $1,400).

Minor support and resistance levels are usually levels where smaller portions of positions are being traded and exchanged. If we take the same example as the above, traders in the bank might be willing to reduce their EUR/USD long position by 10% at 1.3500 and then buy it back at 1.3200. This creates a minor resistance at 1.3500 and also creates a minor support at 1.3200. Again, those levels might have been once, twice or any number of times, etc...

I know all what I said doesn't really answer how to identify support and resistance levels in terms of numbers. Here is how, 1 of 4:

1- Previous Tops and Bottoms
2- Fibo Levels
3- Round Numbers and Figures
4- Upper and Lower boundaries of previous sideways or consolidation areas

After you identify support and resistance levels using those 4, you can then check for each level if it can be considered a major or a minor one.

Hope this helps.

Best Regards,

Nader

Please help me that where we can find last 5/6 years support and resistance records?