Resistance
Support
Support - an area where buyers should act
Resistance - an area where sellers should act
Objective S/R includes :
prior bar’s low or high
immediate prior swing low or high
an area of overlapping bars (consolidation)
prior day’s high, low, and close
unfilled gaps
floor trader pivots
These are “objective” because they depend purely on price.
Subjective S/R includes :
moving averages
Fibonacci retracement levels
trendlines
These are “subjective” because everybody has a different idea about which moving average to use, where to place the Fib high and low, and where to draw a trendline. Not to say that they can’t work as support or resistance. The 50dma and 200dma are widely watched and some traders will act there. But, especially on shorter timeframes, I haven’t had very much luck with these.
For me, the prior swing low or high is the area I pay most attention to. That is where traders have acted before and where they are likely to act again. There is of course no guarantee that “support” or “resistance” will hold, it’s just an area to closely watch the price action.
[ disclaimer : there is more than one way to skin a gopher. Anything that works for you is wonderful and good and you should stick with it ;-) ]
