Formula to calculate resistance and support levels.

#1
hereunder I am giving the formula for calculating
PIVOT POINTS for resistance and support of a
particular stock:

PIVOT POINT = PP

H = PREVIOUS DAYS HIGH
L = PREVIOUS DAYS LOW
C = PREVIOUS DAYS CLOSE

PIVOT POINT: PP = H+C+L / 3

FIRST RESISISTANCE : R1 = 2PP - L
FIRST SUPPORT : S1 = 2PP - H
SECOND RESISTANCE : R2 = 1PP + H - L
SECOND SUPPORT : S2 = 1PP - H + L

tell me how do u find it?I NEED REPLY FOR THIS ON HOW IT IS WORKING.

DO ADD REPS
 

AMITBE

Well-Known Member
#3
Re: formula for how to calculate resistance and support levels.

yankie said:
Everyone Reading This Should Tell Me Did I Do A God Job?
Hello yankie,
I don't know about the God Job, for that matter I'm not even too certain about a good job. ;)
Ok, keep in mind that pivot points are short-term, over-night trend indicators, useful for only one day at a time. They need to be recalculated every day using the changing price movement.
When you are coming in with a bunch of calls, you need to study the historical data for each stock, determin the direction of the trend, it's strength, buying interest, liquidity, historical supports and resistances (which the pivots R1 S1 etc do not povide), etc etc...For each of the above there is a combination of indicators that need to be studied, compared and analysed, entry and exit levels determined, and in a progressing trade, trailing stops need to be detemined etc etc etc...
As for your formula, the proper way of writing it would be:
P = (H + L + C) / 3
R1 = (P x 2) - L
R2 = P + (H - L)
S1 = (P x 2) - H
S2 = P - (H - L)
But for making calls for short, mid, long term trades, do not depend on the formula. Do an in depth study.
Good wishes.
 
#4
Re: formula for how to calculate resistance and support levels.

AMITBE said:
Hello yankie,
I don't know about the God Job, for that matter I'm not even too certain about a good job. ;)
Ok, keep in mind that pivot points are short-term, over-night trend indicators, useful for only one day at a time. They need to be recalculated every day using the changing price movement.
When you are coming in with a bunch of calls, you need to study the historical data for each stock, determin the direction of the trend, it's strength, buying interest, liquidity, historical supports and resistances (which the pivots R1 S1 etc do not povide), etc etc...For each of the above there is a combination of indicators that need to be studied, compared and analysed, entry and exit levels determined, and in a progressing trade, trailing stops need to be detemined etc etc etc...
As for your formula, the proper way of writing it would be:
P = (H + L + C) / 3
R1 = (P x 2) - L
R2 = P + (H - L)
S1 = (P x 2) - H
S2 = P - (H - L)
But for making calls for short, mid, long term trades, do not depend on the formula. Do an in depth study.
Good wishes.
Superb reply,Amit.Excellent.......

Phoenix :cool:
 
#5
Re: formula for how to calculate resistance and support levels.

yankie said:
Everyone Reading This Should Tell Me Did I Do A God Job?
Only expert can comment on this. Different people may have different opinion. If this formula works for you thats fine. Everyone should have his own Trading plan.
 
#8
Re: formula for how to calculate resistance and support levels.

Karthik,

:D :D :D

Saint
 
#9
Re: formula for how to calculate resistance and support levels.

yankie said:
Everyone Reading This Should Tell Me Did I Do A God Job?
GoD Job?
No my friend, This cannot be certified as a gOd Job!

But surely, for the newbies seeking knowledge, it has been an eyeopener on the formulae for R1/2 & S1/2, aptly corrected with logical comments by the seniors here.
 

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