Advantages Of Using Support And Resistance.

The importance of studying support and resistance levels in multiple timeframes cannot be overestimated. Starting from the longest term chart (monthly), traders need to establish the important support and resistances and then transfer them to the medium term chart (weekly) of the same market. Then, having added any new medium term support and resistances that can be discovered, transfer all levels to a short term chart (daily). To summarise:-

1) The study of support and resistance is vital for controlling a position: where to cut risk and where to take profit.

2) trends, patterns and Fibonacci constructions all give rise to support and resistance levels in a single chart.

3) Multiple timeframes give rise to still more levels.

4) The supports and resistances derived from all these timeframes can be simplified by assessing their importance and proximity to any given position.

6) The most important thing is that you will never get a sense of confidence from oscillators. The problem with oscillators is they tell you what happened in the past, and they’re derived from price, Oscillators don’t tell you very much about the future. The way most traders use them, they’re not much better than flipping a coin.