FORMULA FOR SUPPORT AND RESISTANCE LEVELS

 

 

After reading my article on Swing Trade, many readers ask for some help in swing trade. Here is a formula for finding out Crucial levels, Support levels, Resistance levels of stocks for a trading day. Everyday evening you should update it. Calculate this formula once the market is closed. These levels are applicable for the next day trading. Consider all end values as positive values.

 

DOWNLOAD THE FORMULA FOR SUPPORT AND RESISTANCE LEVELS IN MICROSFT EXCEL FOR FREE---- JUST CLICK HERE

EXPLAINING THE FORMULA AS GIVEN BELOW

Step 1. Find the crucial level of the stock for next trading day

Crucial Level = (Days High Price + Days Low Price + Close Price)/3

Step 2. Find support and resistance levels by using Crucial level for next trading day

Support 1 = (Crucial Level x 2) - Days High Price
Support 2 = Crucial Level – Days High Price+ Low Price
Support 3 = (Days Low Price - 2) x (Days High Price- Crucial Level)
Resistance 1 = (Crucial Level x2) - Days Low price
Resistance 2 = Crucial Level +High Price-Low Price
Resistance 3 = High Price + (2 x (Crucial Level -Low Price))

Advantages of these formulas
Identify trading levels
Can use in intraday and swing trading

Disadvantages of these formulas
Volumes are not under consideration
These levels not obey the Index movement, so traders must be cautious on movement of Index

Apply and give me comment on these formulas

 

Thanks for reading

DOWNLOAD THE FORMULA FOR SUPPORT AND RESISTANCE LEVELS IN MICROSFT EXCEL FOR FREE---- JUST CLICK HERE

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TECHNICAL ANALYSIS- A HUB OF JOINT MANIPULATION

One of my friends asked me about the importance of technical analysis. I explained him the real beat behind those analysis. Most of the analysis of a Stock price in the market is based on past performance, stock price move, support level, resistance level, other blah blah etc.

What i felt is that, these price indicators are certain levels where either all participants in the market may go SHORT or LONG. Some indicators followed by the Western socalled analysts are being followed by all people in the world. So a particular formula using by all analysts will give same RESISTANCE AND SUPPORT LEVELS.

So if an action happens then these levels will be hammered more.

FOR EXAMPLE:

i took a postion in Reliance Future at 2445 LONG POSITION with 14 days to the expiry. Resistance was told by most analysts were around 2490 and support at 2435 . Some say it is 2500 and 2440 repectively.

at the time of market close, Reliance surged and closed at 2522. 30 minutes before the close it was above 2495. This created a huge short covering and took the price to 2522. Remember the stock touched intraday high at 2531 also. At this ponit I call an analyst and ask him whether I hold it or not? He replied that I should hold it because the nest resistance is at 2564 so that I can make more money.

I was happy hearing that and slept very well at night.

At night, Dow was flat and Dow futures were in negative zone.

NSE and BSE opened flat and I saw Reliance coming down to 2500 levels. I put a stoploss at 2450 and decide to wait. Immediately before closing a negative news related to Reliance came and Stock price went down sharply taking my stoploss and closed at 2410.

The nexy day management refused the authenticity of the news and it went up again despite the negative trend shown.

When i discussed about this to analyst the he said, it was due to the negative news, or it was an unusaul behaviour.

BUT I STARTED NOTICING THIS IN MANY STOCKS.

WHAT I FELT IS :

All analysts and media creating a fog around resistance levels. Retail traders or some institutions either fresh buy or cover their shorts thinking that it will move up again. This creates an upside move well above the said resistance level. Here, all BIG PLAYERS take Fresh short and wait for any negative trigger. Most of the times, such negative triggers will come from media saying that information from sources

This will help some participants who anticipate such move to make money and all others especially, poor participants like me will loose money.

SO BEWARE OF ALL RESISTANCES AND SUPPORTS: something is cooking behind

Share Market Income: A Myth or Reality

I started trading at the age of 21 and until now I have gone through different up and down in markets.

My college was very near to my first stockbroker. This initiated spending some time with them(later whole time).At first when I was a beginner, I remember that there was nobody to guide me other than my Broker. The trading terminal boys( I call them Devilzzz) usually guide(( misguide??)) to trade like thisn that.

At first I lost 25000/- with in a span of 3 months. CanaraBank was my first try. I gave check of INR 25000/- in the month of March 1987 and at the end of June 1987 I got a call from my broker that I need to give another cheque to hold the items I purchase the daybfeore.

I was shocked, where my 25000/- went?? I was suspectful on my broker( beleive me--I was wrong). I audited all statements and found that Shares of CanaraBank ate my money.

I found an interesting matter. I followed certain rules that went against me. The devilzzz used to bring some Technical Analysis, Intraday Trading tips etc and force us to follow that. In most days I found STOPLOSS is the Villain.

I saw that 90% of my trades booked loss in its STOPLOSS price.

So what i do now??

whom shall i beleive??
Why we need to keep STOPLOSS?

What we will do when the STOPLOSS making more loss?

A number of questions came to my mind.

From where i will get my money back?

I discussed about these situation with the stock broker again. He suggested some small training camps, discussions with elders etc. I started going through different techniques to analyse the markets.

My playground was Cash Market, until I realize what is Call option and Put option, Option trading and Derivatives.This made me greedy( I know you will say that Im not greed, just trying to get my lost money back) and I decided to leave Cash market and try my intelligence in fetching money in Futures and Options.

My Stock broker was happy and he told me to raise more capital and come back to trade.

Being a college student, how I will raise the money 60000 INR atleast.

Here all readers should congrat me:

I got money from my girlfriend ( later she became my wife)

I started trading, at first it was quite nice as some Call options immediately found some money.

But things went wrong when a severe scam hit throughout the market. I took two positions in one side.

Both land in Zero at the date of expiry..

My total Loss creeped to 37000/- till

My broker and trading Devilz console me and show me the Portfolio of some other Traders who lost even more than me. ( actually they were stating that U ARE NOT THE FIRST FOOL TO INVEST IN MARKETS)

I gave a Gap of four months--and I completed my Grduation, got a small job in these period.

I came back to trading . I usually contact them over phone to know how much i earned on that day. I got a lottery in one scrip: I dont like to say the name: And i got all my lost money with some excess,

Vowww...this encouraged me and I didnot take my money back from the Account. My image in Trading hub and in the Stock broker was growing better to best. They introduced me to many newcomers and I became a SUPERSTAR at there within few months.

Things were going good untill I take a decision to invest more money according to advice from an INVESTMENT GURU.

I took a Bank loan of just Six Lakhs and decided to invest in Stock Market.

I divide the amount and deposited in CASH MARKET, DERIVATIVES AND MUTUAL FUNDS.

I saw money growing, growing, growing and I was happy in those days.

RECESSION STORM and ECONOMIC TSUNAMI.....new villian, I didnot book my profits and I was simply keeping some STOPLOSS while trading. Vertical falls and Bounce backs literally killed my money in TRADING.

I pledge my equity inorder to hold my position. All went wrong and my portfolio dried up.

I purchase some shares of low cost..all went southwards.

DONT BLAME ME:

i always hear TV channels...

i always read newspapers...

i always look how Hangseng moving...

i always look how Europe is opening...

i always look how DOW future behaves..

i always analyse how DOW &NASDAQ landed the day before..

i always put stoploss

i always study chart

i look in different websites

BUT ALL WENT WRONG

i still remember an analyst saying Reliance Industries is a Good Pick at the price of 2700.

i still remember an analyst saying ABAN is an excellent pick for long term when it was above 2000.

i still remember in a TV show, explaining the growth of ISPAT INDUSTRIES when the stock was included in F&O

WHERE AM I NOW?

while writing this, I lost my eight lakh investment and my profit of twenty lakhs in total.

I know you are smiling by hearing the small amounts. But remember, I am the representative of common traders in India, who come ,sit and watch to the monitor of trading hub from 9.55 Am to 3.30 Pm. They usually leave the STOCK BROKER with a great sigh.