How to declare resistance / support at a certain price
Pardon for this question. But I noticed gurus doing this and I have no idea how this is done.

Let's put BHI as an example: sabi ni master GI dito was strong support at .15 and this happened. It didn't go below .15 at umakyat na ulet.

So ang question ko is: How do we compute for the price of the support (na minsan followed pa na pag bumaba may next support price)? Same question for resistance, pano nacocompute yun at pag nabasag may next at xxx amount na kelangan basagin?

cash is king ... ako ang alas (bawal tularan ... nakamamatay)
i think there are may ways to determine support and resistance both using charting and mathematical computation. since mahina pa mata ko in recognizing patterns, i use price pivot reversals for determining support and resistance, just google it for more information.

"A man should look for what is, and not for what he thinks should be." - Albert Einstein
it's arbitrary.
here are some ways to plot or identify support and resistance;

1. Trendlines... By checking previous high... you'll get the resistance. By checking previous low, you'll get the support

2. Other's use 20 and 50 Day Moving Average as their Support and Resistance. Or some use settings 15 and 45 DMA.

3. Bollinger Bands also a good tool in identifying support and resistance

4. Or use the classic Fibonacci Retracement Tool sa charting software mo. It can be used also to spot support and resistance.

hope this helps... Smile
here's my take on HORIZONTAL support and resistance.

previous highs (or lows) of a stock act as support and resistances. the MORE volume the stock has on the highs (and lows) of the stock, the stronger the support (low) and resistance (high).

once a support (or resistance) is broken, i quickly scan which is the next support (or resistance) - or if you're using AMI, i already draw the supports and resistances of the stock i'm watching para alert na during trading time.

i usually test buy and get a small amount a few flucs BEFORE the support hits as usually, the line (pila) to buy at the support levels are pretty long. by this time, you should already know where the NEXT support is so that you know if you are willing to CUT before hitting the next support or if you can afford to HOLD.

if the stock bounces on support, i buy the next batch one or two flucs after.

same goes with SELLING on resistances.

i do this TOGETHER with looking at other indicators, if the stock is nearing your overbought/oversold oscillators while near support/resistances, the better the chances of a technical rebound.

moving averages also act as support and resistances.

institutional investors use the 50 200 moving averages (gurus please correct me if i'm wrong) as support.

in my experience, there is no perfect setting for moving averages when it comes to determining support and resistances - these are also dependent on your trading style.

i personally have 5,15, 45, 65, 130, and 200 on all the time so that it's easier for me to spot where a particular stock bounces.

hope this helps. =)
buy high, sell higher!

stock market abbreviations (for newbies)

"when it comes to trading, i'm just barely smart enough to realize that i'm a total idiot. i might be considered stupid, but on the intelligence scale, it puts me comfortably ahead of all the dumber people who thinks they're better than me."


Forum Jump:

Users browsing this thread: 1 Guest(s)