Is this the correct way to draw S&R lines? | Forex Factory

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Is this the correct way to draw S&R lines?

  • #1
  • First Post: Jun 26, 2023 11:11am Jun 26, 2023 11:11am
Greetings.

I trade since around 2017 but left this thing for a while and came back and I wanted to look for something that cuts your losses fast and lets your profits run, which I saw in S&R. I have an indicator on TradingView that shows me the lines but I look forward to drawing them myself on M5 or M15. Please, be kind and show me.

Cheers!
  • #2
  • Jun 26, 2023 11:19am Jun 26, 2023 11:19am
Is it like this?
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  • #3
  • Jun 26, 2023 11:51am Jun 26, 2023 11:51am
Or like this?

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  • #4
  • Jun 26, 2023 11:59am Jun 26, 2023 11:59am
others may name it differently.
to me that's a trend line.
an ascending trend line is to be drawn by connecting the lows when the high is broken.
if the high is not broken, it is a triangle or ascending line (not a trend line).
horizontal lines are support and resistant, best to be drawn on higher time frames like h4 and above to be considered major SR, otherwise, it is minor SR.
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ITB - Seeing Orderliness amongst 'Randomness'
  • #5
  • Jun 26, 2023 12:23pm Jun 26, 2023 12:23pm
Cheers. Just wanted to ask you, is this a correct way to short until 0.90175 or lower?

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  • #6
  • Jun 26, 2023 12:29pm Jun 26, 2023 12:29pm
Is this the correct way to buy just at as soon as the price reaches here?

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  • #7
  • Aug 8, 2023 2:55am Aug 8, 2023 2:55am
Oftentimes the price can reach the S/R levels very fast due to some important news or other events. So you have to set the pending orders to catch it there.
Also the question is where to place the S/L orders. I mean there is no universal answer to this. You should view all the market situations independently.
  • #8
  • Aug 19, 2023 1:24pm Aug 19, 2023 1:24pm
nowadays i use a supply demand indicator
ForexCracked.com - Free Forex EAs & Indicators for MT4/MT5 Download
  • #9
  • Aug 19, 2023 10:37pm Aug 19, 2023 10:37pm
Quoting Inthebox
others may name it differently. to me that's a trend line. an ascending trend line is to be drawn by connecting the lows when the high is broken. if the high is not broken, it is a triangle or ascending line (not a trend line). horizontal lines are support and resistant, best to be drawn on higher time frames like h4 and above to be considered major SR, otherwise, it is minor SR. {image}
I saw alot of resistances and supports but how do we know which one is the valid one that we can put the order. Sometimes when it breaks the trend lines and retests, it spikes through the broken line like this. And we put the order when it retests right?
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  • #10
  • Aug 20, 2023 1:00am Aug 20, 2023 1:00am
i kind of use a grid for support and resist.

Weekly to daily to 3h
https://www.tradingview.com/x/HAImhJOZ

Then rejection of the levels suggest my bet to go in the direction.

https://www.tradingview.com/x/uqqWrfwv

https://www.tradingview.com/x/AuBRi7BF

Patience is key though. But when you let it play out it is good
Trading is gambling. So gamble responsibly.
  • #11
  • Aug 20, 2023 1:34am Aug 20, 2023 1:34am
Follow the basics

 

  1. Identify Significant Highs and Lows: Look at the price chart of the asset (stock, forex pair, cryptocurrency, etc.) and identify the most significant highs and lows. These are the points where the price reversed direction or encountered strong buying or selling pressure.
  2. Draw Horizontal Lines: Once you've identified these significant highs and lows, draw horizontal lines across the chart at those levels. These lines represent your potential resistance and support levels. You can use charting software or platforms to draw these lines accurately.
  3. Use Multiple Timeframes: It's a good practice to identify and draw S&R lines on multiple timeframes. For example, you might want to draw lines on daily and weekly charts if you're analyzing a stock. This can help you identify both short-term and longer-term S&R levels.
  4. Consolidation Areas: Besides the prominent highs and lows, look for consolidation areas where the price moved sideways for an extended period. These areas can also act as potential S&R levels.
  5. Confirmation: A single touch of a price level doesn't necessarily establish it as a strong S&R level. Look for multiple touches or bounces off the same level to confirm its significance.
  6. Price Clusters: Multiple S&R lines might sometimes converge around the same price level, forming a "cluster." These clusters tend to be stronger S&R levels as they combine different timeframes and types of S&R lines.
  7. Dynamic S&R: Apart from horizontal lines, you can use trendlines and moving averages to identify dynamic S&R levels. These lines adjust as the price moves, and they can provide additional insights into potential reversal points.
  8. Psychological Levels: Round numbers (e.g., $50, $100) and historical round numbers often act as psychological S&R levels due to their significance to traders.
  9. Volume and Patterns: Consider volume and chart patterns when drawing S&R lines. High volume at a certain level can indicate strong buying or selling interest, reinforcing its significance.
  10. Regular Review: Markets evolve, and S&R levels might change over time due to various factors. Review and adjust your S&R lines to reflect the most recent price action.

Remember that no S&R level is foolproof. While they can provide insights into potential reversal points, they are not guaranteed to hold every time. Using S&R lines in conjunction with other technical and fundamental analysis tools is essential to make well-informed trading or investment decisions. Additionally, practice and experience are key to proficiently identifying and using S&R lines effectively.

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  • #12
  • Aug 20, 2023 3:28am Aug 20, 2023 3:28am
Quoting Stevooo
{quote} I saw alot of resistances and supports but how do we know which one is the valid one that we can put the order. Sometimes when it breaks the trend lines and retests, it spikes through the broken line like this. And we put the order when it retests right? {image}
it is very difficult to do an analysis using a limited amount of data on a single chart.
it is more prudent to trade with the knowledge of higher time frames and candlestick size.

so based solely on the chart
trend line break - retrace - continue
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  • #13
  • Aug 20, 2023 4:59am Aug 20, 2023 4:59am
Quoting Inthebox
{quote} it is very difficult to do an analysis using a limited amount of data on a single chart. it is more prudent to trade with the knowledge of higher time frames and candlestick size. so based solely on the chart trend line break - retrace - continue {image} {image}
Can i ask about the orange line and the arrows? Pls give me more explanation i'm newbie
  • #14
  • Aug 20, 2023 5:15am Aug 20, 2023 5:15am
Quoting Stevooo
{quote} Can i ask about the orange line and the arrows? Pls give me more explanation i'm newbie
blue arrow is buy, red sell.
the yellow and orange lines are support and resistant.
if you are selling, price has to close below them.
if you are buying, price has to close above them.
ITB - Seeing Orderliness amongst 'Randomness'
  • #15
  • Aug 20, 2023 5:44am Aug 20, 2023 5:44am
Quoting ObadaAdel
Greetings. I trade since around 2017 but left this thing for a while and came back and I wanted to look for something that cuts your losses fast and lets your profits run, which I saw in S&R. I have an indicator on TradingView that shows me the lines but I look forward to drawing them myself on M5 or M15. Please, be kind and show me. Cheers!
There is no correct/wrong way.
If you put 100 people in a room they will all come out with different S&R markings and the reason is because it's highly subjective and there are no clear definition.
I suggest you come out with your own definition and draw these S&R accordingly
  • #16
  • Aug 20, 2023 6:05am Aug 20, 2023 6:05am
Quoting Inthebox
{quote} blue arrow is buy, red sell. the yellow and orange lines are support and resistant. if you are selling, price has to close below them. if you are buying, price has to close above them.
here is my example after read all of your explanations, just wondering is that right
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  • #17
  • Aug 20, 2023 6:35am Aug 20, 2023 6:35am
Quoting Stevooo
{quote} here is my example after read all of your explanations, just wondering is that right {image}
do not expect to know straight away if the concept is new to you.
take your time to learn.
i am just showing a safer way to trade.
do not forget to wait for retracement when support resistant is broken.

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  • #18
  • Edited 8:15am Aug 20, 2023 8:03am | Edited 8:15am
Quoting Inthebox
{quote} do not expect to know straight away if the concept is new to you. take your time to learn. i am just showing a safer way to trade. do not forget to wait for retracement when support resistant is broken. {image}
Thank you so much for your feedback, but i don't get the 3 candles for long entries and the engulf. What doest that mean and is the function of it?

I can see have to look for starting point of the impulse wave right?

Moreover, vice versa for short i have to wait until the price breaks and close below the support right?

Sorry for being annoyed i'm quite a curious person.
  • #19
  • Edited 8:59am Aug 20, 2023 8:39am | Edited 8:59am
Quoting Stevooo
{quote} Thank you so much for your feedback, but i don't get the 3 candles for long entries and the engulf. What doest that mean and is the function of it? I can see have to look for starting point of the impulse wave right? Moreover, vice versa for short i have to wait until the price breaks and close below the support right? Sorry for being annoyed i'm quite a curious person.
what does engulf means?
the 1st candle engulf means momentum picks up to go north.
that is the price level that institutions pump money to push up.
when price retraces or returns to the same level, it pushes up again.
up and down, up and down. the price level got tested a few times until resistant broken.
this means there is significant support zone there.

yes to the rests of your questions.

example of engulfing.
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  • #20
  • Aug 20, 2023 11:11am Aug 20, 2023 11:11am
Quoting Inthebox
{quote} what does engulf means? the 1st candle engulf means momentum picks up to go north. that is the price level that institutions pump money to push up. when price retraces or returns to the same level, it pushes up again. up and down, up and down. the price level got tested a few times until resistant broken. this means there is significant support zone there. yes to the rests of your questions. example of engulfing. {image}
i kind like got it right here anything you want to me to improve? Broken point and close above
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