In my opinion, to talk about the lines of support or resistance, it is necessary all the same that they are formed by a certain number of touches and bounces. Like for example the resistance line at level 15 of your chart. Levels 20 and 30 are more psychological levels than technical ones at the present moment.
Think of me as a student. Both questions are to enable learning. I am not making a knowledge claim. And I learn best by trying and examining actual charts for myself. I could have asked:”what charts prove TA is right?” But figured there would be responses to go read TA books, etc. But asking about charts showing TA being bullshit, I figured there would be actual examples of charts and I was right on that point. Based on responses on that thread I think TA IS NOT bullshit
There are a lot of threads at this forum where traders recommend specific books on Amazon beyond just saying "go read TA books". Yet, I've notice some of the books you can get for free from your local library or university. Some here have even recommend specific free websites on topics like this. This is part of the process of being a student of TA...learning how to research these topics on your own. Once again, there's no one chart that can prove TA is right or bullshit. No one chart can do that and I think you missed the point about that when it was pointed out to you the other thread. Most technical s/r levels can be computed and the TOS software you're using (reflected in your chart) has that option...it computes trendlines, channels, moving averages, pivot points, fibonacci levels and many more types of s/r levels. Yet, after you talk to a lot of traders here at this forum or any other forum...you should have quickly realized by now that everybody has their own interpretation which should raise the flag about subjectivity application eventhough its objectively computed in software (charting programs). The part that sucks is that a different charting program (e.g. TradeStation or eSignal) will computer completely different levels than what TOS has computed...therein is another issue about subjectivity. That TOS software your using will give you TA on hundreds of charts every trading day regardless if its good TA or bad TA. In contrast, psychological levels are computed by the what ever the specific trader thinks is a key level in the price action that reflects fear/greed or a key change in supply/demand. Usually its an easy number to remember and often a round number. Sometimes its a number they heard some financial analyst on a financial TV channel spit out, other times its a number talked about at a site like bloomberg, CNBC or whatever. Psychological levels can be used by those that really do not use TA and it can be used by those that also use technical levels. Also, I've seen psychological levels first began as a technical level but as time goes by (days, months or years)...it gets talked about as a psychological level...easy to remember as such. Most will try to fade that psychological level or trade with the direction of it as a breakout. Psychological levels tend to be more embedded in our memory (easy to remember) whereas we easily forget a recent technical level to concentrate on the new technical level. That's why I mention you need to backtest the topic and then forward test about anything you're curious about because anyone can cherry pick a single chart to show TA as reliable or not reliable...as stated its called cherry picking. Therefore, its not about one chart or a few charts or examining actual charts as you've been referring too in several threads. Its about you backtesting (you can do it manually without coding skills) the specific TA you're interested via enough historical data to tell you this is a specific topic that you want to invest your time & energy into learning more about instead of just reading what thread at a forum has the most conversation/replies about a TA topic (e.g. ACD method). With that said, you now seem to be zooming in on a specific topic in TA. It too can be easily researched online (e.g. Google or Bing) and researched here at this forum (e.g. search menu) that's been explained many times before about this particular topic you seem to have an interest unless this is more about you only interested in the topic explained to you with recent charts from the recent trading days, weeks or months. A student of TA knows how to research. I can get more deep into where I first heard about "Psychological Pricing" from a geeky PhD student (studying marketing) a few decades ago when I was in college...consumers will associate a number like $2.87 for milk with the lower number $2 (easy to remember) instead of with the higher number $3 but that's getting too deep into the topic but can be heavily researched too. That association allows the seller (store) to manipulate prices within a particular range (psychological range) within the $2.00 - $2.99 price range. Something else...men use more easy numbers (whole numbers) to remember in trading while women are very price specific in their trading...something else to research. For example, a man will tend to say I shorted AMD around the 34 level whereas a woman will tend to say I shorted AMD at 34.05 wrbtrader
I vaguely touched on the topic in my prior message post that you should first explain how you determine those levels on your chart before asking if its right or wrong. For example, did you manually determine those levels or did you use one of the settings in the TOS software ??? If the latter, that's why I mentioned in my prior message that a different software (e.g. TradeStation, eSignal, Multicharts et cetera) can use the exact same calculations and then draw their lines in different locations for the same chart (price action)...welcome to automation of TA. In contrast, if you manually determine your lines...how did you that because when I look at the chart based upon my own trading experience and how I trade...I would have placed my lines in different locations. Both of the above (computer and manual) will result in subjectivity in the application and more so about how to trade those lines depending upon whom you talk to with a completely different trade experience and different trade method. Lastily, although its AMD or anything else...not every chart program or broker has the exact same data. There will be differences by a few ticks in some of the intervals. wrbtrader
Thanks for your replies. I drew the lines myself based on the understanding that the s/r line should touch as many candle tops and bottoms as possible. If I may ask where would you draw the lines and why? Thanks