Hi just what the title is asking. Also is it the same as for support? I cant really figure it out. It seems like sometimes it goes one way and sometimes it doesnt. Whats your opinion?
My opinion is that it's an approximation, a ballpark number... especially if it's not a round large number.
Well, get in the habit of referring to it at S/R, they're one in the same. It's just a level that exerts pressure on the price. Think of it like gravity of planets or moons. It will either come in too slow and stop at S/R or or will come in flying and slingshot past it going out as fast as it came in...or just come in at normal speed and find an "orbit" around it until something disrupts it and sends it flying on one directing or the other. And remember, it's not the price that exerts the pressure, but the behavior of traders at that price. The price approaches it, and more people decide it's a good pivot as you get closer (whether delta hedging or just "I think this is fairly valued at..."). Watch for it to happen at option strike prices (for example 350 will see more price action than 353.47...for both the individual retail decision and the professional hedge). S/R isn't a level that holds inherently for price, it's a level that confirms and reinforces signals, towards which prices will tend, or defining a range that movement outside of represents a likely move out of the "orbit" and continuation away from S/R.
we don' talk about a single candle. it should be a series of candles. perhaps you can post a chart so that we can better answer your question..
I don't think it matters if there is one candle or a series of candles. It's still arbitrary. S&R happens at certain levels when in real time there is a transition to more aggressive buyers than sellers or more aggressive sellers than buyers. This then creates an excess of buyers or sellers that start queuing up in line. This excess is either visible by a stacking effect at certain price levels in the order book, or it's held off screen(ice berg) or in a dark pool( equities). This is really where S & R is coming from.
It depends on the specific strategy. This in one strategy...the extremes of the wick may be used as s/r levels and in another strategy it may be used and something else is used instead as s/r levels and then in another strategy the length or location of the wicks may be uses as s/r levels. Whatever your strategy is...backtest it and then simulate trade it. The funny thing is this...even after you've backtested it and then simulate traded it...it still most likely won't be good enough to prepare you for real money trading because the human mind will most likely do something a little different because it knows its real money on the line in comparison to backtest/simulator trading.
I don't ever plot S/R lines on my charts - they're just too unreliable. Many traders do get good guidance from them but I would recommend if you are drawing them, use a very thick crayon, not a very fine pencil.