Significant Reference Levels

Discussion in 'Technical Analysis' started by Maverick1, Jul 14, 2011.

  1. What makes a high or a low more significant than other levels, be they pivot points or whatever else?
  2. For me,

    Higher TImeframe = more significant of level.
    How price reacts at the level (eg if a hammer forms as reaction to level)

    Nothing is set in stone, IMO looking at the reaction to the level is the most important.
  3. What is it about a higher timeframe that makes it more significant of a level? Is it that more time was spent at that price, meaning stronger value was established there? Or is it that more volume flowed in at those levels? Or both.
  4. From my understanding of the markets larger participants use larger time frames therefore more volume is probably traded near those levels by the large participants establishing or defending their positions near those levels. It may look like a consolidation range on the 5 min but will look like a bounce off the level on perhaps the 1 day time frame.
  5. ============
    Basic but good question

    Yes yes & yes;
    also combine that with percentage gains/ losses & round numbers-decades of them.

    QQQ@$120 area ;
    all time hi, all time 50% off sale is $60 area

    Silver all time hi $50 .15?+/[probably exceed that within 12+/ month]s.
    See what i see/ mean.Not a prediction

    The more data , the better;
    small sample is just enough to be dangerous:D
  6. wrbtrader


    There could be several reason. Thus, a different reason on any given day.

    One day that high or low could be the result of a key market event (e.g. FED action, ECB action, economic report, key speech that key market participants are monitoring, breaking world news, price reaction to another key market and so on).

    Another day that high or low could be due to a key change in volume, volatility or pure market psychology after being hyped in the prior trading days by key market participants.

    Another day, no just happen.