Resistance, Support Lines

Discussion in 'Learn how to trade or invest by asking questions' started by puppy, Nov 19, 2013.

  1. puppy

    puppy New Member

    Hello Everyone

    I am new member here and just begun few DAYS ago learning with online trading stocks. For my case I would use platform called Speedtrader but I won't do any "real money" trades yet since I am currently at complete zero. Just started. Got some literature, mainly video tutorials and helping myself as much as I could via google research. However I got stucked on first step already, trying to learn how to draw on the chart resistance and support lines but so far no resource is helpful. Nothing that I can use. I have learned the basics about resistance and support such as what do they mean, how do they look like, for what they can be used after saving chart and opening it again, definitions, etc. However nothing I found was helpful when it comes to exact explanation HOW and where to draw them on support line. I know both (or one of them or none) resistance and support line don't need to be horizontal. Cannot go further with learning if I don't "master" the current learning step - drawing resistance and support line on chart. All resources so far that weren't helpful only explained what those two lines are for and showed charts out of nowhere with already drawn both lines. I am searching for accurate and perfect step by step explanation WHERE exactly on the chart can they be drawn. Along other facts about those two lines I have learned that both shall be drawn based on the following parameters (if I missed anyone, please let me know):

    - stock should reach as many as possible times particular price
    - as much as possible trades successfully done on this price and its proximity (since i am total beginner, i currently have no idea when trade is successfully done and when not, what is the difference between red and black color on candle chart, how far is should be so it is counted as proximity,...)
    - as much as possible Recent info about price
    - as extreme as possible fall of price (if support line) and/or as extreme as possible raise (if resistance line)

    So my obvious question is: Could anyone please explain me how exactly and where to draw those two lines on charts? Under which other parameters? How do i decide where they will be? Some remote desktoping session (webinar) would be much appreciated too if possible.

    Thanks a lot in advance and will stay active as much as i can on this forum.
  2. Blaine Tarr

    Blaine Tarr forum leader won penny contest 24x won weekly contest 20x

    First off, Welcome! Second -This comes with EXPERIENCE. Don't expect to understand this overnight. But you're on the right track. Don't try to OVER-ANALYZE. It takes time to get a FEEL for when/where to draw lines. It also depends on your chart time frames as s/r levels will change. Trendlines are ever changing. Many of s/r levels are on .25/.50/.75/whole dollar areas. Whole dollar levels will be some of the easiest setups to see. Keep in mind not every chart is clean. There are sloppy charts just not worth trying to plot out levels as there are too many. I look for the easy trades. Anyway, here's a few of the FREE things I have out there. I have seminars and videos for my subscribers that go into my trading style further and frequently add new videos discussing recent trades.

    Ascending Triangle patterns - Discussing supply vs demand equating support/resistance.

    My Ford 'setup' example chart on my sales page.

    Free intra-day setup recap video discussing a stock in play awhile back, but chart is still great to learn from. Chart School Support/Resistance page:

    Trading is truly an art form. Everyone can evolve their own style in time; and strategies are constantly changing. I hope you enjoy learning.
  3. puppy

    puppy New Member

    Blaine thank you for your reply. I appreciate your provided links but unfortunately they (excluding your sales letter - second page) aren't useful. I have seen those links already and nothing is actually explained there. Providing the fourth link makes me thinking I wasn't understandable enough so I will repeat what I look for: As complete beginner I would like to learn step by step how to draw R/S lines on the chart but for example on fourth link there is no explanation on this. Only what R/S lines mean. No instructions and first line on the first chart is shown literally out of nowhere. Not really helpful because I need to know WHERE on charts to draw them and why exactly there. Ideally (which probably won't happen) I am searching for step by step method such as:

    1. Search for X subject under A timeframe (x axis) and B price (y axis)
    2. Find the point in said location that meets Y conditions
    3. If conditions met, do Y subject, otherwise do W subject.
    4. Repeat first step for different point.
    5. Finally draw the line.

    I know such intructions might not exist but I would still like to ask you or anyone else for accurate tutorial/manual on this that will really explain well where to draw them on the charts. Currently Im stucked completely already on not even first microstep of start and cannot go further if I don't learn this. Also building cannot begin to be constructed in second floor if first one isn't finished, it will be demolished.

    So hopefully you/someone could please provide tutorial/explanation how to accurately and perfectly draw them on chart. Fortunately as started I know little theory behind those two lines but it doesn't anyhow help with knowing where to draw them.

    Blaine I will consider joining your coaching business and will also contact you on the email address - I have written it down. I particularly like live chats/discussions (as said on your letter) - nothing is better than gathering knowledge from more experienced people discussing exact topic. However I would have one friendly constructive suggestion for you. It is in no way anything harsh or anything negative but anyway: I have been learning for a while methods of internet marketing so called Search Engine Optimization and everything (e.g. tracking visitors that arrive on website, what they are doing, how, what they are searching, etc, links, creating brand reputation, how to be seen on very valuable websites via redirecting/inbound links, keywords marketing, optimizing website with different elements and how visitors are reacting on updates and billions of others subjects in big science How to put website and its particular relevant page as high as possible on search engine to get higher probability that person will click on the title of your website's page and become potential client) related to it. For the past few months I put this ''on hold'' due to many reasons and one of them is also extreme raise of interest into learning how to trade stocks online. What I want to say is that I politely suggest you to completely redesign this letter because everyone will think its spam message. Its not website, only sales letter you can hardly target for keyword optimization from aspect of being seen on search engine from ''stranger'' - potential client. I know this consulting is your secondary or even thirdly source of income, I fully respect it and thats why I am suggesting you to rather hire some pro content writter who will construct, also from psychological aspect, breath-taking content which can be then used to construct the real website by whoever. I know you didn't expect telling you this but once again, please don't take this as criticism, just a friendly advice. You are risking too much potential income from this with that sales letter.

    Anyway, my original question remains so I would highly appreciate some explanation, tutorial or even a lesson about drawing those two lines so I can resume with learning based on my current literature.
  4. Blaine Tarr

    Blaine Tarr forum leader won penny contest 24x won weekly contest 20x

    Puppy, I appreciate your feedback. I know my ascending triangle video is outdated and my sales page sucks. In time I will update. I am however working on more structured lessons and have someone working on the software (as I type) so I can offer actual courses on my site.

    By reading your last post, I realize you are a perfectionist and prefer to have A+B=C Which is great! However, the answer you seek is just not as such. Like I said, this is an art. It can be interpreted in many different ways. That is what makes trading so much fun! You know how I learned to draw the lines? PRACTICE.... It's like riding a bike or anything for that matter. It takes time, patience, and work. Eventually you'll figure it out and have that "Ah Ha" moment where you just get it and the training wheels come flying off.

    Quick rundown:

    Every top can be considered resistance as people were willing to sell there.

    A) Get a candle chart of a stock you are interested in.
    B) Pick a recent top
    C) find the the next top
    D) find a third top
    E) Connect the dots.

    Easy right? Again, don't try to over analyze. Just pick out the tops and draw. Now you have a resistance line. This could be horizontal or the top channel in an uptrend. Okay, so now time frames matter. Are you looking at the past 5 days, past month, past 6 months? Now this is where the art comes in because you can find different levels on different time frames. Can you practice a few? You can easily draw on charts at Just click annotate buttons on lower left below a chart to get the pop up box. Here's an example of a setup I'm watching for a breakout over the resistance line.

    MDXG 2.jpg
    Last edited by a moderator: Mar 22, 2014
  5. puppy

    puppy New Member

    So if I understand you correctly then the method of drawing both resistance and support line so much depends on personal needs that those two lines ''almost'' cannot be drawn incorrectly? I am referring to the personal needs as:

    - which timeframe am I intested for ,
    - on approximate which price would i like to sell or buy - obviously i should probably draw the lines as close as possible to ''target'' (wanted) price.

    Is there any other ''personal need'' I should know (even if advanced one for pro traders!) or only those two? The video I am currently learning from doesn't anyhow say those two needs would depend on where exactly would I draw both lines. So I might be very wrong with my assumption. In the video is said that four criterias named in the first post of the topic (please look up at the First post to make sure to what criterias am I referring to) depend on where exactly will be lines drawn. So those two ''personal needs'' don't depend. What is now correct? I think I cannot include both (four criterias from first post, two ''personal needs'' from this post) because, e.g. fourth criteria:raise/fall can be most extreme in completely different time/price comparing to what I am interested for selling/buying.
  6. Blaine Tarr

    Blaine Tarr forum leader won penny contest 24x won weekly contest 20x

    Are we building an algorithm or learning how to read a chart? Can we start much simpler?

    You're right some 'personal need' comes into play because I'm looking for short term key levels. Maybe another person is looking out further or buying off news. Everyone buys for different reasons. If we all bought for the same reason no one would make/lose any money.

    I don't need to look back 5 years to determine current resistance levels. I'm just looking at near term support and resistance levels for trade setups. I do that by looking at a candle chart to see those levels. I do not need to bust out a calculator to figure this out. In fact my edge in trading is being able to see the setup before the crowd. While you're trying to mathematically figure out the lines, I'm already making money and going to sell to you after you figure it out.... Make sense? Trading is an ART. You must find your edge.

    What do you like to do for fun? I'm going to make an analogy, so hopefully you will see where I'm coming from and we can get down to learning. I really just want you to practice drawing these things and I think you'll have that "AH HA, I get it" moment.

    On the MDXG chart above, current resistance is 6 because it tested that level several times and failed to breakout. Sellers (supply) are in control at that point so it is resistance. The 6.50 is not the target price because "I want" it to be, but because it is the next spot were sellers took over. Thus in the future there will still be people willing to sell at 6.50. Therefore, I can use that as my potential target. There is no guarantee it gets there, but just based on past price action it can be used. Here is another example of a stock I am watching today ACHN.

    ACHN update.jpg
    Last edited by a moderator: Mar 22, 2014
  7. puppy

    puppy New Member

    Probably both - algorithm and learning how to read the chart to put then those two lines on it. So both. Not sure how much serious was your question about what I like to do for fun. Anyway, I would most likely say the gym. Appreciating the chart you pasted but please note that I wouldn't open this topic post if no reason for it. While doing research, I have visited many web pages showing such charts with already drawn both lines on it but its not helpful because of no exact explanation. So Im afraid showing charts with both lines on them won't help. If lines shows drawed from nowhere, it beyond me how am I supposted, as complete beginner, to understand why exactly on particular locations instead of e.g. 2mm above or 3mm below, etc.

    I guess just being focused on interested time and look at highest UP (highest candle - for resistance line) and lowest DOWN (lowest candle - support line) isn't appropriate solution because I have seen many examples where res. line was a way below the top and support line a way above the most lowest DOWN, even if looking at the timeframe I was assuming author was interested for.

    I noticed both charts you pasted have res/support going through or ''touching'' the ''weird'' little line located in exact center of candle's (rectangles) bottom or top and being directed upward (from top) and downward (from bottom). Im aware there is for sure some technical term for this ''weird'' line but currently I can only describe it in such way. I think res/support lines also go away from this little ''weird'' line, therefore they (referring to res/support lines) can ''touch'' candle's bottom or top. If this isn't true or if the fact whether or not the res/support will ''touch'' cangle's bottom/top OR will touch the ''little weird line'' depends on particular situation/condition/fact/etc then I will have to go through entire new lecture via google - researching and learning in what situation they touch the bottom/top of candle and in what situation they touch ''little weird line'' (whatever it means) plus, in latter situation, where do they touch or go through this little line. Just to try to clarify again what do i mean with such term: if you look at the first out of two charts you pasted, on 26th Aug and go to the right side for 3 white (only white) candles, you will see on the third white candle some weird line going upward the top of the candle and res. line is going right through the top of this line. It could go through it in the middle too or wherever else, or it could just go through the candle's top (touching the top).
  8. Blaine Tarr

    Blaine Tarr forum leader won penny contest 24x won weekly contest 20x

    Awesome! Keeping it simple, think back to when you learned how to do a bench press or squat. A friend or maybe a teacher/coach helped you out at first right? In fact you probably still have spotters today.

    There are many different variations of these workouts. Finding the right combination of weights and grips to develop the muscle tone you wanted took experience over many sessions. It also took time to see results and increase max lifts. What worked for you may be different for others. You also may change workout routines over time to give way to rest or prep for max lifts. In this regard, weighlifting is an art and people show off their bodies at competitions. No 2 bodies are exactly the same.

    No 2 traders are exactly the same. There are many strategies out there. Some have nothing to do with support/resistance. Others focus only on support/resistance. It took me time to figure it out. I didn't get it at first either. I was like what the hell is support and resistance. It first hit me when I watched a stock hit a price level at the top of a chart 3 times and I said to myself, "whoa that's resistance." I had my "Ah ha" moment. I even remember the ticker symbol! (doesn't matter what it is, because when you get it, the chart you're looking at will stick out like a sore thumb forever)

    That said, let's start from the beginning:

    Reading a candle chart:


    Piecing it together on time frames. Most look at daily chart first to see how it reacts on a day to day basis. Example here one candle equals one day. DXM chart from this past week. I narrowed it down to only past 5 days for explanation purposes.

    DXM 1.jpg

    Now draw the line across the tops.

    DXM 2.jpg

    Does it have to be the top of the shadow every time, NO. I can be a combo of open/close tops and wicks if they reach a specific point several times. Other shadows/candles can be outliers. You even mentioned in your first post:
    Same idea for support.

    DXM 3.jpg

    Draw the support line.

    DXM 4.jpg


    DXM 5.jpg

    Now we can take a look at the big picture by looking at a larger time frame. Here's the daily chart for past 6 months:

    DXM 6.jpg

    Now get out there, find some charts and start drawing! I promise once you make the effort to draw on some charts you will start to get this. Focus on finding tops and bottoms, then draw the lines. Start with big picture 6 month or 1 year charts, then zoom in to smaller time frames such as 2 months or 5 days. Practice, Practice, and more Practice.

    P.S. You owe me $100 for this lesson..... :cheers:
    Last edited by a moderator: Mar 22, 2014
  9. Blaine Tarr

    Blaine Tarr forum leader won penny contest 24x won weekly contest 20x

    To add

    Why would you want to draw above or below. The lines are based purely on where traders are willing to buy or sell. As in the supply and demand as I have discussed in the links I first posted above. Supply = resistance, demand = support.

    I did a quick 3 minute video on how to draw lines on charts for free without a broker or platform.

    Practice, Practice, Practice.....
  10. puppy

    puppy New Member

    Yes I really said that stock should rich as many as possible times particular price where resistance/support are supposted to be Correctly ( ! ) drawn but most likely under the following four rules:

    - price must FAIL to raise (for resistance line) or to go below (for support line) so there must be as much as possible red indicators that show failing of raising/reducing price.
    - price i would be interested for selling (resistance line) or for buying (support line) has nothing ( ?!?! ) to do with where to draw the lines. This seems very weird rule. If is correct then first one is wrong. If is wrong then first one is correct. On the same chart for sure cannot be implemented both rules.
    - lines are NOT horizontal only in case if I am looking at larger timeframe. E.g.: few months.
    - it does NOT (is this correct?) matter if lines go through (or touching it) shadow line or not (not going through shadow line = touching the top/bottom of candle). Neither it matters through which part of ''shadow'' would they go. You named that part of shadows with High, Close, Open and Low words.

    For sure one rule is wrong, could be more too. This wrong stated rule can be either first or second. Both are impossible to be valid on the SAME chart. Reason? Noone can force anyone to be interested for the same price (second rule) where most failing points are (first rule).

    Anyway I did some practice with drawing on random charts. Here it is:

    chart 1:
    chart 1 with lines:

    chart 2:
    chart 2 with lines:

    How does it look? Don't answer positively just to make me happy :) Be honest if is correct.
  11. y2j721

    y2j721 New Member

    The pictures that you posted are too small to see!!!
  12. Blaine Tarr

    Blaine Tarr forum leader won penny contest 24x won weekly contest 20x

    It's okay you'll get there. I'm just glad you drew out a few. EOG you're very close.

    Here's what you drew:

    11-23-2013 11-39-48 AM.jpg

    No wonder we are not seeing eye to eye. First, this is an OHLC bar chart, NOT a candle chart. If you want to learn this for real click on candle chart next time or go to as I mentioned in the video I linked to in this post. Your chart is a 1 month view zoomed in to just the past few weeks with the bars equaling 15 minutes.

    Now, in my opinon EOG is more of a long-term stock unless truly willing to scalp/day-trade using big chunks of capital. I'm not, so I scroll out the time frame to see more days and less candles. It's much easier to see true range on a daily chart. Here is what I drew for 1 month on daily EOG. Remember 1 candle equals 1 day, hence DAILY chart.

    EOG daily 1 month.jpg

    CTBI - You're resistance line is is right there. Here's what you drew:

    11-23-2013 12-10-49 PM.jpg

    I have same daily chart for past 1 month to see true range.

    CTBI daily 1 month.jpg

    Now, as far as rules go, rules are made to be broken! Creating a set of clear cut rules for chart drawing will only drive you crazy in the long run because many charts won't meet the exact criteria.

    Your gym workouts change, such as do charts. Change is constant, don't try to tie it down using rules. You can't control buyers and sellers. Even constitutional laws can change/added as we evolve, like gay marriage and smoking marijuana. If you want to create rules, then set them for yourself in terms of how much risk you are willing to take on for a trade or such.
    Last edited by a moderator: Mar 22, 2014
  13. Blaine Tarr

    Blaine Tarr forum leader won penny contest 24x won weekly contest 20x

    Are you using a computer or mobile phone? Either way your browser should allow you to zoom in.
  14. blazer

    blazer Member won penny contest 14x won weekly contest 3x won 2014 simulator 2x

    You are asking very good questions.....
    Alot of them are the same ones I asked when I started to learn.
    I have only been trading for 11 months, ( Joined Blaines room this past Jan.), and hoping I am not stepping on Blaines toes here with my post.

    It took me 3-4 months to be able to correctly draw s/r lines,trendlines, ect.
    When Blaine said There are many strategies out there, he couldn't have been more correct.
    I have switched my strategies three -four times, trying to find what best works for me.
    (No matter which I picked, I still followed what the chart told me, and the chart patterns Blaine taught me.)

    From going long in a stock, looking for bottom bounces, breakouts, to shorting stocks (which is my favorite right now).

    It all takes time, and the best advice I can give you is what Blaine already said, practice, practice.
    I would print out a few charts, draw my lines, and the watch the stock preform and compare it to what I drew and how I thought it was going to preform.

    Another thought I would offer is that when you do start trading, have a plan and stick to it.
    know your risk tolerance, don't over trade, and do not feel like you have to be in a trade everyday or every min.
    There are alot of times I just sit, watch and learn

    Good luck with your trading.......
  15. puppy

    puppy New Member

    I apologize but I still don't understand completely this part of knowledge - where to draw both lines. Don't know if my four lines in two charts are correct. You only said for one but I assume other three might be correct too then - I drawed them using same ''logic''. In my previous post I listed the following guessed rules:

    Which one(s) is/are correct and which one not? Please be as direct as possible. First AND second one (BOTH) cannot be correct, thats for sure. Only one (either first or second) is correct. There must be some rules. I cannot just draw where I am interested for the price to sell/buy. There might NOT be anything to ''fail'' which is the point where it comes to those two lines. I might be repeating myself all the time and I apologize for this. Don't want to be too annoying but I am very new to this. Just telling me to practice or just showing charts with lines drawn out of nowhere won't help. Blaine in the post number 12 in the second chart you showed that third rule is wrong. On your chart lower timeframe, less than a month and in the third statement/rule (quoted text - this message) I wrote completely opposite fact. Hopefully you or someone else could add or modify the rules as directly as possible so I could finally move ahead with learning.
  16. Blaine Tarr

    Blaine Tarr forum leader won penny contest 24x won weekly contest 20x

    Puppy, get out of your own way for a few minutes. Stop worrying about rules right now. I keep telling you this is an art project NOT a math problem with defined directions. There are already programs that will calculate s/r levels for you. But these lines are ever changing and in my opinion those calculations can lead you astray. If you want to be able to adjust trades on the fly and manage risk properly then learn s/r levels as an art form.

    Go back and re-read my posts slowly.... read them again, slowly....

    Now go draw on more candle charts NOT bar charts. Do 25, yes 25, not just 2. Then do 25 more. The more you do the better you'll get. Your rules can be created over time. Blazer's post above reiterates practice, practice more practice. It took him several months to get good at it.

    Albert Einstein didn't create his Theory of Relativity out of thin air......

    You know the general idea, now get out there, experiment, most importantly, HAVE FUN! If grinding out chart drawings is not fun for you, you will never "get it." It's fun for me, I could spend all day (beer in hand) on just drawing on charts if my wife/kid would allow. :beerglass:
  17. Blaine Tarr

    Blaine Tarr forum leader won penny contest 24x won weekly contest 20x

    Did this guy give up already? Sadly most come looking for the quick answer but aren't willing to put in the practice. You're favorite sports player usually has spent at least 7-8 years (high school + college) mastering that sport. Why on earth do you think you can spend a few days studying charts and have everything mastered? If you're not willing to put in the effort you will never get what you want in life.

    MDXG as posted the chart here in this very thread; did exactly as I expected it to do once it broke 6. High of day was 6.58 - right on target.

    ACHN also posted the chart here in this thread for the 3 break, and sure enough closed the week up at 3.46.

    I will reiterate one more time. Be able to identify simple tops and bottoms as discussed here. Creating rules before you even know how price action is shown on a candle chart is limiting your ability to read a chart properly.
  18. Deathdealers747

    Deathdealers747 Member weekly contest winner

    I think "puppy" is sticking too much to his narrow perspective that is preventing him from viewing your perspective. Plus, now I could be wrong, but he made a lot of particular spelling/word mistakes that may indicate American English is not his first language. For example, he said "rich," instead of "reach."

    Now, I am a complete beginner as well, but I wanted to make a post at least attempting to help him in my own way.

    Everything that Blaine and Blazer said is correct, but "puppy" kept reversing back to his original statements. He has done this 6 times now in his posting on this thread. Clearly, he is not viewing the proper perspective required to answer his own questions.

    "Puppy" if you read this, I will attempt to show you the perspective as best as possible.

    "Puppy," everything that you just listed is: Wrong!

    1. Price peak = resistance = a safe zone that owners of the stock are willing to sell at.

      Price drop barrier = support = the minimum amount of time that buyers are willing to wait before purchasing shares of that stock.
    2. Your "weird rules" and "weird lines" are confusing your own self. You're jumping the gun by attempting to analyze the lesson, before finishing the chapter of the book. Finish the chapter first, then go back and analyze.

      These "weird rules" don't even exist. Just ignore them, for now.
    3. The horizontal lines indicate the Support and Resistance level, which then leads to future Breakout levels.

      The slanted lines indicate the Trend Direction. It can can either go: up, down, or sideways (no trend).
    4. Breakouts = Good News! You can either predict a Breakout to go up or down, but a Breakout will never go sideways.

      Breakouts occur on a magnifying level. For example, you can have a breakout occur during 6 month chart, but within that 6 month chart can have hundreds of mini-breakouts during a 1-7 day chart.
    5. Charts are used to analyze the history, to ensure that the future follows its past history.
    My advice, is to take a step back from your own perspective. You're zoomed in way too close to your own perspective, that you are not allowing yourself to view other perspectives.

    What am I saying? Open your mind, so that you can learn from someone else's mind.

    Psychologically, you're creating all of these "Rules and Restrictions" for yourself, before you've even finished this chapter in the book. Please, lift these "Rules and Restrictions," so that you can help yourself see what is right in front of you.
  19. Skeeterd

    Skeeterd Member weekly contest winner

    I don't know if puppy learned anything, but this thread has taught me quite a bit.
  20. puppy

    puppy New Member

    I didn't give up but what I was asking wasn't answered so I somehow decided to move ahead and came to another ''newbie'' issue already I am trying to understand. It is very basic but it is taking me a lot of time and research to figure out. I am trying to do on my own so I wouldn't spam your forum or waste your time (and everyone's else) too much - noone likes to be asked too many questions. Surely it would be quicker if I just asked but therefore 90% of topics on the forum could be just my, although I know I could just update my (this one) but it is also my duty to do my own work (=research) first, although I would love to have some experienced pro trader on who I could rely on when I get questions but too many to ask every single one and more I learn, through more trading knowledge I go and more questions occur, thats obvious.

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