Why Support and Resistance Lines will not improve your trading

support and resistance lines will not improve your trading simply because they are only guidelines, they are only the macro, and they surely help you understand better the big image, before entering to a smaller resolution (micro) to make the right trade entry decision, which should be calculated by timing, price, the micro movements between buyer and sellers, which can only be seen by very easy-to-read and stable volume flow platform, and when all stars arranged together in straight line you hit the Buy or Sell button.

About our Support and Resistance Lines (S/R Lines)

 
If most of the traders believe that “some line” is “the line” it becomes “the line”
 

Inline image 3

Before going further on support and resistance lines or supply and demand areas you should understand that they are mostly based on a time-based bars chart.

A “word” about Time-Based bars

  • With a time based bars, the best is to watch what everybody watch… 2 minutes/ 5/10/15/30/60/daily/weekly.
  • For better understanding areas of supply and demand, look from the biggest time frame “macro”(e.g weekly or daily) to micro (2/5/10 minutes bars).
  • We recommend those because they known by most of the traders.

What is S/R Lines?

  1. These are Support and Resistance lines, simple as that.
  2. You can use them to understand better what ALL TRADERS sees on a specific instrument you watch.
  3. When you know what others see on their chart, with a color variation which tells you how each line is ranked by others, it gives you an edge when trading together with VolFlow’s signals –VolBars/VolSign.
The bottom line is When you understand areas of supply and demand, what left to do is to take the trade at the exact prices (entry and exit).

 

Intuitive Colors

Colors by ranks: 
  • the S/R Lines works on any time frame resolution and recalculated on every new bar on the VolChart.
  • The most valued lines are the “fresh” ones (virgins)
  • If new support line “born” it colored with GREY(7) as a most valued line.
  • Then if market uses the line it turns Pink(6), then if it used again it turns Blue(5) and so on.
  1. Red (lowest ranked – higher possibility to break the line)
  2. Yellow
  3. Green
  4. Orange (brown is not clear enough over a dark background)
  5. Blue
  6. Pink
  7. Grey (highest ranked – lower possibility to break the line)
Is the order of the colors remind you of anything?
Inline image 1
 

How it looks on VolChart?

  • The number near every line is the price.
  • The number in the brackets represent how many times the line is tested.
  • The text format is: the “Price(Tests Counter)”, for example:
Inline image 2
Other examples:
Inline image 2Inline image 1

Bottom line about the new S/R Lines

 
We did not “reinvent the wheel”, we just simplified it.
“Support Lines”/”Resistance Lines”/”Supply Areas”/ “Demand Areas” There are many theories about something very simple in trading. Some traders take it too serious, we think it is more like a self-fulfilling prophecy, we look at support and resistance lines to understand the MACRO, to understand prices and areas in the market. We take seriously the depth of market, and the actual initiator buyers and sellers, we take seriously the traders who make a price change in the market, the MICRO.
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