Help finding areas of support and resistance?

Hi guys. I often read posts stating that ''price is expected to test 1.400 levels'' or ''price may find support at 1.400'' etc. Can someone explain how these levels are found? Is it just a case of finding support and resistance channels on longer TF's? Finding horizontal support and resistance at certain price levels? Can someone explain to me how i may go about finding these levels? Which are the most important? And how can i know for sure when price is moving towards a specific area? Thanks.

Those levels are a bunch of bullshit. People like to discuss round numbers because it makes everything all warm and fuzzy in their little minds. I've seen more guys lose money because they thought something magic was going to happen when price reached a round number.

Sooner or later, someone is going to post a chart to show you that one time, price did turn around at a round number. It was most likely completely random but they will assign order to it and then try to repeat it in the future.

By the way, did the USDCHF just stop at a round number or did it blow right through?

Areas of support and resistance (S/R) are exactly that, areas. They are not totally defined. So by that measure the area may be different for everyone.

For myself, I only take into account the next nearest swing high and swing low on a weekly and a daily chart. By that my definition is simple.

A swing high is a candle with the previous 2 bars and the following 2 bars being lower.

A swing low is a candle with the previous 2 bars and following 2 bars being higher.

I take greater notice on weekly areas of S/R than daily. Also whole numbers (140.00, .8800 etc) are great turning points.

Once I have identified an area of S/R I may look for other supporting reasons but more or less if I get a good price action candle off it then I will act upon it.

Screen shots below to show what I mean.

1st is a weekly with next resistance and 2 support levels. The first support has multiple touches and is at 8500 pysch level. If there was PA off resistance and I shorted the first would be a good level to aim for

2nd is a daily chart with those weekly levels on them

It is true, that is why I only use them as an area to be aware of. Price action is a key to making a trade from these areas. I dont personally care much for the level itself but the candle/bar that occurs will give you the information you require to make a trade decision

Razor

Don't get fooled from round numbers, supports and resistances are dictated by traders, not by numbers. There is 1% of possibility that a support-resistance point end with 00, it all sound sad :| Trading is not a game, there is no round-number magic, things are much more complex then a "00" number

I've traded S/R exclusively for the last year or so. My areas are based purely on previous price points that have proven to be significant in the past (some of them go back years).

I treat every area as only having the potential to affect price so I sit and wait for confirmation of how the market perceives these points of interest.

Only rarely do these line up with a round number, sometimes they are close but not often enough for me to change my methods.

Zoom out on any weekly or monthly chart and the areas where price has reversed are immediately obvious. Mark them up but don't assume that they will create a reversal this time.

The key word here is 'potential'.

one example

00 (and 50) lines, on g/u 5' candles, seem to make great center lines; price, once it settles down into an area, goes around it. Occasionally they're s/r, usually not. (pic)