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Determining Support & Resistance

  • #1
  • First Post: Oct 31, 2015 9:25pm Oct 31, 2015 9:25pm
While we are trading forex, the most crucial things should be known are support & resistance. These are trader's map to make proper decision by seeing boundaries of price movement. Whether overbought or oversold.

Although there are various ways to determine support & resistance pointers. But here is my simple way using Bollinger Bands.

I am going to use real case on this example by directing on daily analysis for today (September, 15. 2015) with GBPUSD.

These are supports & resistances for today on GBPUSD. Once hit the line, it will continue at least halfway. Or if hit the line but reverse and hit the opposite line without making significant movement, then it will go back as a trend.

GBPUSD, SUPPORT & RESISTANCE, DAILY (SEPTEMBER, 15.2015).
Attached Image (click to enlarge)
Click to Enlarge Name: 2015-09-15 07_39_10-GBPUSD, SUPPORT & RESISTANCE, DAILY (SEPTEMBER, 15.2015) - GBPUSD TradingVie.png Size: 85 KB
  • #2
  • Oct 31, 2015 9:27pm Oct 31, 2015 9:27pm
How did we do it?

First, set Bollinger Bands with Period = 6.

For example (see picture above for reference): if price 1.54151 is hit (without making movement on down direction) but then reverse and hit 1.54447, again, without making movement on up direction (halfway), then finally it will go down (the trend will go down), AND VICE VERSA.

DONE, TP (take profit).
Attached Image (click to enlarge)
Click to Enlarge Name: 2015-09-15 22_24_38-GBPUSD, SUPPORT & RESISTANCE, DAILY (SEPTEMBER, 15.2015) - GBPUSD TradingVie.png Size: 75 KB
  • #3
  • Oct 31, 2015 9:29pm Oct 31, 2015 9:29pm
Well, it's from my side, and this thread specifically for sharing knowledge about determining support & resistance. So, don't hesitate to share with us of how you did it :-)
  • #4
  • Nov 1, 2015 1:04am Nov 1, 2015 1:04am
You are not doing yourself a favor with the BB's. Support-resistance is derived from dynamic price action reading. Dump ALL indicators.

Keep in mind: resistance becomes support, support becomes resistance, price has memory...


Daily GBPUSD chart:

Attached Image



Flip to 4h chart:

Attached Image (click to enlarge)
Click to Enlarge Name: 4h.PNG Size: 37 KB



You seeing things?



Best regards,

Sulz
Take care,Sulz.
  • #5
  • Nov 1, 2015 1:41am Nov 1, 2015 1:41am
Thanks as i am still learning on forex.

You share valuable insight. And yes i'll keep that in mind

Quoting sulz
Keep in mind: resistance becomes support, support becomes resistance, price has memory...
I am just exploring alternate approach on BB as generally known http://www.babypips.com/school/eleme...ger-bands.html and since BB[6] was more responsive indicator to determine support & resistance.

Quoting sulz
You are not doing yourself a favor with the BB's. Support-resistance is derived from dynamic price action reading. Dump ALL indicators
And yes as you said, i am far away from your expertise determining support & resistance through price action trading. But, your post is a valuable insight for me to explore it further.

Thank you :-)
  • #6
  • Nov 1, 2015 10:34am Nov 1, 2015 10:34am
Quoting Seremonia
How did we do it? First, set Bollinger Bands with Period = 6. For example (see picture above for reference): if price 1.54151 is hit (without making movement on down direction) but then reverse and hit 1.54447, again, without making movement on up direction (halfway), then finally it will go down (the trend will go down), AND VICE VERSA. DONE, TP (take profit). {image}
nice approach,
so your entry point would be on the second touch of the 1,54151 level with the TP on the next support level and with SL on the 1,54447 level?
Are you sure this method would survive in the sidewise or choppy market?
  • #7
  • Nov 1, 2015 12:29pm Nov 1, 2015 12:29pm
Hi Seremonia - Suls (above) is 100% right, and you should pay a great deal of attention to his post.

Your method of using BB to determine/predict future support/resistance has no more validity than a randomly drawn horizontal line. No impoliteness intended, but it's important and worthwhile to appreciate what Suls is wisely saying, to avoid wasting a lot of time "looking at things with absolutely no rationale for working" at all!


Quoting colombino
nice approach

I'm afraid not: purely fictitious approach, actually.
  • #8
  • Nov 1, 2015 2:00pm Nov 1, 2015 2:00pm
For those telling Seremonia he/she shouldn't use BBs as support/resistance, could you put up your TEs to get 350% in 67 days?
Seems to be working for him/her.

Nice trading Seremonia!
  • #9
  • Nov 1, 2015 3:38pm Nov 1, 2015 3:38pm
Quoting Seremonia
How did we do it? First, set Bollinger Bands with Period = 6. For example (see picture above for reference): if price 1.54151 is hit (without making movement on down direction) but then reverse and hit 1.54447, again, without making movement on up direction (halfway), then finally it will go down (the trend will go down), AND VICE VERSA. DONE, TP (take profit). {image}
Nice trading and seems to work for you. well done
Curious on what you use to validate your entry. Would you take a break of the reasonable looking pin or wait for price to take out the double bottom candles in a sort of 1,2,3 type set up.
You really need something to say its good to go or price could easily just creep back up. Am I right in thinking you consider your lines to be invalid if price goes through to halfway to the next line?
  • #10
  • Nov 1, 2015 6:10pm Nov 1, 2015 6:10pm
Quoting srt
For those telling Seremonia he/she shouldn't use BBs as support/resistance, could you put up your TEs to get 350% in 67 days? Seems to be working for him/her. Nice trading Seremonia!



I think that's a real big thing in trading myself - leave everyone else alone if you've figured out what works for YOU. What works for YOU isn't necessarily what WILL work for everyone else...

Nice work Seremonia....very nice..
"Holy Grail" exists - accepting where is the first step.
  • #11
  • Nov 1, 2015 6:42pm Nov 1, 2015 6:42pm
Quoting Xela
Hi Seremonia - Suls (above) is 100% right, and you should pay a great deal of attention to his post. Your method of using BB to determine/predict future support/resistance has no more validity than a randomly drawn horizontal line. No impoliteness intended, but it's important and worthwhile to appreciate what Suls is wisely saying, to avoid wasting a lot of time "looking at things with absolutely no rationale for working" at all! {quote} I'm afraid not: purely fictitious approach, actually.
Hehehe, yes, i already noticed what he said to enrich my future approach.

I was here creating thread not just for sharing but to push my spirit to always continue my trading, including the most important .. exploring researching others to be adopted. So seriously i would accept any suggestion or opinion. So that's okay for me - SERIOUSLY :-)

About fictitious approach ..., Okay i will explain it philosophically. Bollinger Band detects possible overbought/oversold, so if we accept it then further logically, those pointers (upper/lower band) must be considered (possibly) as farthest boundary. And that's okay for us to consider it as possible farthest range of volatility in short term - at least daily.

Thank you :-)
  • #12
  • Edited 7:00pm Nov 1, 2015 6:45pm | Edited 7:00pm
Quoting colombino
{quote} nice approach, so your entry point would be on the second touch of the 1,54151 level with the TP on the next support level and with SL on the 1,54447 level? Are you sure this method would survive in the sidewise or choppy market?
Hi

I was using this support and resistance mostly to warn me about how far I still could hope go higher or lower. It can be said as volatility indicator. Or when my order was floating and I had no way to decide whether I had to go or stop, this help me much to calm my emotion.

For example on this cart, USDJPY went down on POINT B as far as POSSIBLY notified by POINT X.

The problem is for how far we could draw the line, it’s as far as average movement for one day of specific pairs. Suppose the second line couldn’t be found, then we can refer to previous day as long as within daily range of USDJPY. Or if needed we can switch from H1 to H4 just to see if there is a reference to be used to draw line (as long as within average rank of daily movement of specific pairs).
Attached Image(s) (click to enlarge)
Click to Enlarge Name: Support Resistance Farthest.png Size: 42 KB
Click to Enlarge Name: Support Resistance H4.png Size: 33 KB
Click to Enlarge Name: Support Resistance H4 (2).png Size: 56 KB
  • #13
  • Nov 1, 2015 6:58pm Nov 1, 2015 6:58pm
Quoting srt
For those telling Seremonia he/she shouldn't use BBs as support/resistance, could you put up your TEs to get 350% in 67 days? Seems to be working for him/her. Nice trading Seremonia!
Seriously i would accept any suggestion or opinion. So that's okay for me - SERIOUSLY :-)

Thank you :-)
  • #14
  • Nov 1, 2015 6:59pm Nov 1, 2015 6:59pm
Quoting Spoon138
{quote} Nice trading and seems to work for you. well done Curious on what you use to validate your entry. Would you take a break of the reasonable looking pin or wait for price to take out the double bottom candles in a sort of 1,2,3 type set up. You really need something to say its good to go or price could easily just creep back up. Am I right in thinking you consider your lines to be invalid if price goes through to halfway to the next line?
It could be, but usually i was using it to warn me for how far i still had to go up/down. For how far (compared to average of daily movement) still there was reasonable chance to up/down. So, mostly i did took order first with another strategy and using this to always warn my steps carefully.

Or, if i were late for an entry then this way might be considered (and still compared to average of daily movement).

So this is just one of another way combined with your own strategy.

Thank you :-)
  • #15
  • Nov 1, 2015 7:09pm Nov 1, 2015 7:09pm
COOL beans .. How long have you been testing the 6 Boll bands ..luv it bro
What div?
Thanks
Learn THEN Unlearn
  • #16
  • Nov 1, 2015 7:12pm Nov 1, 2015 7:12pm
Quoting HighFivve
COOL beans .. How long have you been testing the 6 Boll bands ..luv it bro
Within a year of my research, although during that time i was using it rarely just for a precaution when my open position was floating, hehehe :-)

Thank you :-)
  • #17
  • Edited 7:41pm Nov 1, 2015 7:15pm | Edited 7:41pm
Quoting Xela
Hi Seremonia - Suls (above) is 100% right, and you should pay a great deal of attention to his post. Your method of using BB to determine/predict future support/resistance has no more validity than a randomly drawn horizontal line. No impoliteness intended, but it's important and worthwhile to appreciate what Suls is wisely saying, to avoid wasting a lot of time "looking at things with absolutely no rationale for working" at all! {quote} I'm afraid not: purely fictitious approach, actually.
Not to forget, hi Xela

For him (Sulz) , he is an expert. And i hardly tried to determine using purely price action trading, but currently it's hard for me to see it without getting help of Bollinger Band to see a consistent boundary. But perhaps later i could do, wish me luck :-)
  • #18
  • Nov 1, 2015 7:21pm Nov 1, 2015 7:21pm
Quoting VaBikePacker
{quote} I think that's a real big thing in trading myself - leave everyone else alone if you've figured out what works for YOU. What works for YOU isn't necessarily what WILL work for everyone else... Nice work Seremonia....very nice..
Okay :-)

Thank you :-)
  • #19
  • Edited Nov 2, 2015 10:05am Nov 1, 2015 8:04pm | Edited Nov 2, 2015 10:05am
DETECTING BREAKOUT RESPONSIVELY (another way applying BB[6])

I would like to add a little bit more of how we can apply BB[6] further.

Using BB[6] we could detect a breakout at the very early stage and clearly spotted. We just have to adjust time frame from H1 to 30 minutes, INCLUDING, finding the time where it's most active rather just sideways (unless BIG sideways).

Usually it was marked with this shape. There was a constriction that could be spotted clearly (compared to a higher period of BB) with two opened lengths each has similar angle (approx.). So, we have at least 30 minutes more (within an hour) to take action. But this must be considered firstly we have a knowledge of where possibly the market will go up/down.
Attached Image(s) (click to enlarge)
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Click to Enlarge Name: breakout 2.png Size: 27 KB
  • #20
  • Nov 1, 2015 8:12pm Nov 1, 2015 8:12pm
Quoting dkrock
The 6 bband works for a reason. It is a sub-value often used for scalping small time frames. Applying it to a large time frame will make profit on vertical movement, but whipsaw you to death during consolidation. Not sure if you just "guessed" or used some method to arrive at 6. Because you are drawing art on your charts, I will assume you just guessed. I am also going to guess that you could trade just as easily without the bband? Correct? It looks like you are just waiting on line touches and then making guesses on direction. I am not trying to...
Hi

About finding direction, i already did it just before touching the lines. You can see it on my trade explorer, as i always made an open position at the very early stage of a day, it's at approximately 23:59.59 on MT4 SERVER, or 20:59.59 on TradingView or a little bit late. The rest i was using it as a precaution whether i had to change my stop loss or i had to do cut loss or just simply let it go (putting stop loss at the end of a day).

Thank you :-)
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