Hey guys...I have a question about Support and resistance...it might be pretty lame but oh well I dont know how to find the Support and resistance on a chart.. Heres the intra day chart for YAHOO today http://ichart.yahoo.com/b?s=YHOO can anyone tell me where the suppost and resistance line would be? and how do you find it on a chart? Sorry for the newbie question.
Two ways: - get charting software for basic tech analysis and note high/low and midpoint of previous day, plus current week (as a start) - read news. You'll find many commentators include S&R in their commentary (ie. www.futuresource.com does this). The second way is easiest plus can uncover where the herd is likely to act.
Read this thread carefully and download the PDFs. It will give you a very good start. http://www.elitetrader.com/vb/showthread.php?threadid=29005
couldn't agree more you need an EOD charting software. nothing fancy. try prophet.com javachart, they're free to a certain extend.
sometimes its hard to find strong Supports & Resistances on 1min charts, theres too many spikes and lulls in the trading day. the further back you look, in time scale, the easier and the more significant the support/resistance levels become.
You will find the real definition of support and resistance on this web page to be one of the most valuable lessons you will learn in a post here on ET. http://www.tatoday.com/Book/SupportAndResistance.htm
The definitions provided at the beginning which focus on prices paid is correct. However, the rest of it is largely half-truths. Trendlines and MAs do not in and of themselves provide support and resistance.
Volume traded at those levels is also very important in finding support and resistance. Here are our definitions and we have a few versions of support and resistance but this is good starting point. http://www.trade-ideas.com/Help.html#CAR
MAs do suck, for the most part. However, trendlines DO PROVIDE support and resistance; IF you know how to construct them. And as SocalTrader pointed out, one should also take note of volume.
Support & Resistance are the Extreme Tops & Bottoms in any price action. Price action is chart specific so Support & Resistance will be chart specific (Einstein). Once you see & believe that price is the perfect indicator then you need to find "ONE" accurate momentum indicator that consistently "reads" the price action to give you the confirmation of those Extreme Tops & Bottoms in the price action. It took me 8 years to find and verify it so start researching the indicators till you find it. Pack light your journey will be a hard one.