Support and resistance

Discussion in 'Technical Analysis' started by Chuck Krug, Dec 4, 2008.

  1. anyone knows how you can get the support and resistance in line form like this?
  2. anyone?
  3. Lucrum


    Looks like two separate Donchian Channels to me.
  4. it's a chart from ed seykota by the way
  5. This is really easy to do in any charting application that allows you to code. I have a similar chart that I created using Amibroker's language. This could easily be done in NinjaTrader or eSignal as well.

    You need to specify a time period for the S/R to be displayed, i.e. yearly, quarterly, monthly, weekly etc.

    Of course you need to enter the S/R calculations as well.

    I'm very busy through the holidays so I probably won't be able to reply to any posts or PM's. I thought I would enter a quick reply to let you know that it is a trivial task.
  6. John,
    Thanks for your reply.
    I have another issue: that support and resistance always has been: a ,for example, 120 day high and low for long term and a 30 day high/ low for intermediate support/ resistance (these numbers are the most optimal according to ed seykota's backtest) But I digress, I mean those are fixed numbers, I don't understand why they change (and thus form a line). Thanks

    I'm trying to understand this simple system on the trading tribe site.

  7. Thanks,
    will look into donchian channels some more.
  8. The line may change because the greatest price value of the prior 30 days changes. You might experiment with an Excel spreadsheet and price data. =max(g2:g31) shows the maximum value of 30 cells, = min(g2:g31) shows the minimum value.
  9. ====================
    Looks like a D channel as said earlier., Chuck

    Think you may be right on 30 day s& R[month] ;
    that does not sound right or logical calling 120 days long term,
    thats not even 200 days.Even if that is right for gold???;
    not necessarily right for stocks.

    But i would not exspect Ed or any one else to give all his details away free;
    however helpful mr Ed may be.

  10. well, he included some backtesting data (see link)

    Optimization Table

    for Simple Support / Resistance System


    Yellow (across) Trading Metric (5 to 105, step 5)

    Green (down) Trend Definition Metric (20 to 420, step 20)

    Trend definition lines shorter than 100 days don't work well

    Trading lines shorter than 15 days don't work well.

    Trend lines around 140 days work best.

    Trading lines around 30 and 40 work best.

    The optimal solution is 120/30.

    The solution at 140/20 appears for comparison.

    Solutions where the trading line metric > trend definition metric,

    show as 0, as in 20/25.
    #10     Dec 10, 2008