#7: Time Matters
How far away in the past should you go looking for support and resistance levels?
It depends on your trading style/technique and the timeframe you are using to trade.
For my case, I use multiple timeframe trading a lot and therefore it is important for me to do top down technical analysis from the monthly charts down to the 1hr timeframe to identify where the major support and resistance levels are including trendlines, price channels etc and I have lines drawn up on my charts there to remind me should price ever come close to those levels.
But here’s the thing: the more recent support and resistance level has a much greater significance than those that have been formed “millions of years ago”.
Why is this so?
Well, because what happened in the past may not be easily view able on the trading platform that many traders are using, which means you have to really switch to a much larger timeframe or minimize your zoom out to see what happened in the past.
When trading, put a lot more focus on the recent support and resistance levels.
If there are no recent support and resistance levels then start expanding by going out further into the past to see if you can find support and resistance levels there.
So there you have it. Trading support and resistance levels first starts with you knowing which are the best levels to pick.
It may take a while if you are new but over time, it just becomes second nature.
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