iCharts Discussions

[SwingTrader]

How to use iCharts Levels

iCharts levels are key intraday support/resistance levels.

The base level is LOC, a level that divides the bullish & bearish moves. Price moving above this level is bullish and price moving below this level is bearish.

A level above LOC is BULL and a level below it is BEAR. Beyond BULL level are 5 resistances R1...R5. Below BEAR level are 5 supports S1...S5.

KEY SUPPORT/RESISTANCE BANDS

The price band between BULL & R1 levels is major resistance/support (based on where the price is). If price is below this band then the band acts as major resistance and if price is above this band then the band acts as major support.

The price band between BEAR & S1 levels is major support/resistance (based on where the price is). If price is above this band then the band acts as major support and if price is below this band then the band acts as major resistance.

IDENTIFYING TRENDING DAYS USING KEY SUP/RES BANDS

On most days the market will stay between these two bands only indicating range day. Market moving beyond these bands early in the day indicates a trending day where major moves can happen.

On a range day one would observe market opening in one of the bands and then reversing to the other side.

On trending days market will generally quickly (within the 1st hour) go beyond the bands, consolidate and then take off from there.

MORE STUFF TO BE ADDED HERE..........

[SnoopTrade]

Hi ST,

Thanks for guiding us.... I was trying to use the levels for quite sometime with the help of the post that you have provided earlier for the manually calculated levels. Has somewhat success with that.... but still struggling with it. I am unable to make a consistently successful strategy based on these levels. Probably I am missing something,somewhere.

Hope you will soon post more related information regarding this levels which will help us a lot.

One more request, if it is possible, please look into it. If the icharts levels for previous dates are also available then it will be helpful for backtesting. It could be made available like SB archive download...

Have a wonderful day ahead!!

Regards,
mave_rick

[SwingTrader]

mave_rick,

Thanks for your post.

As I have always said, I have used my manually computed levels mainly for targets/stops. That is the reason why I have not been able to post a proper complete strategy. The levels worked best when combined with a trend following trading method for targets/stops OR for trading reversals when anticipating range days.

I have redesigned the "iCharts levels" a bit differently to clearly distinguish bullish/bearish levels (see discussion on bull-r1 & bear-s1 bands). Due to this, designing trading strategies for iCharts levels is much easier.

I will post examples in the next few days.

I will also think about making historical iCharts levels available. We are storing those in our database, so we should be able to provide some way to let you download/view previous day's levels.

[SwingTrader]

Below is yesterday's (27.10.2009) 5 min NF chart with the levels marked. The chart illustrates the importance of BEAR-S1 key support/resistance band. As I had mentioned, if market moves beyond this band early in the day then a strong move down can be expected.

Similarly, the BULL-R1 band also is key resistance/support band, if price moves beyond it (above it) early in the day then a strong move up is probable. I will post an example of this as and when we see action around this band.

[vamshi]

Thank you Sir. I am have learnt to identify trend / range day .
-Vamshi

[SnoopTrade]

Hi ST,

If possible, please add more examples, as you see in the market for using the price band.

Regards,
mave_rick

[SwingTrader]

mave_rick,

Sure. The bands (one or both) come into play almost daily. I will start posting examples. Didn't realize people were looking at these levels I use these levels everyday in my trading, especially the bands.

[SnoopTrade]

Hi ST,

You are being too modest and humble. I think atleast, half of the iCharts user, if not more, is using this levels. May be they have different strategies based on this levels.

I myself use it mostly for taking profit and placing SL but not for initiating the trade. Somehow,I find it difficult initiating a trade while using it. However, since you are the one who has made this levels, it would be nice, if you give your inputs and then maybe I get an idea how to use it while initiating a trade.

I guess lots of people,including me, will be waiting for your next post in this thread

[girishhu1]

your post alongwith charts pcsted dated 281009 is great. we all are using the i chart levels whenever required. pl keep posting.

[hbanerji]

ST: that post from you was the under-statement of the year-or-whatever.

for your information, yes, every day, at every turn of the market, many people try to read the market using your levels... i use the word "many" because i know of these "many", like me, who network over the phone to share & discuss & debate upon your levels.

so, if there is some way that you can shed more light, it will be more than a welcome boon. for your info, when your column came up in i-charts (remember the tailpiece in the menu...?) the "many" tried to see what you might have to say...
high time now, if i may say so...?

also, for your info, another expert is also avidly watched... our most venerable jimmie.
but unfortunately, you are GREATLY silent and jimmie is mostly so.

to everyone in icharts sb, my best regards and a wish for happy trading and mainly to you ST (&PT &kamal &the rest of course), for such a wonderful experience.

i am sure that everyone is looking fwd to ST: your column

[SwingTrader]

girishhu1 / hbanerji ,

Thanks, I greatly appreciate your support.

[SwingTrader]

To reiterate : both BULL-R1 and BEAR-S1 are key support/resistance bands. If price is rising into the bull-r1 band from below then strong resistance may be encountered here and there is a possibility that prices may reverse. At the same time a breakout above this band can mean significant upside. Also, price declining into the bull-r1 band can get significant support here. So these are both support & resistance areas based on where the current price is.

Similarly bear-s1 bands - expect significant support if price is declining into this area and expect significant resistance if price is rising into this area. Breakouts above / breakdown below can mean significant moves in those directions.

Though trading strategies can be devised around these, I strongly suggest that one use "iCharts Levels" for stop loss & targets. They are very effective for this purpose.

The BULL-R1 band came into play on 06.07.2010. Price opened around LOC and found support immediately. My first thought when such a thing happens is that now price will rise into Bull-R1 band so a trade here could be a buy with SL little below LOC and an initial target around Bull-R1 area. Once price enters a band (bull-r1 or bear-s1) what it does there and on which side it breaks will decide what to do further - move stop further up or close out the trade.

Price breaks out above the bull-r1 band so stop is just moved further up as R2 & R3 targets are hit.

If price would have broken down below from bull-r1 band then I would have exited the position and a possible short would have been initiated with SL above R1 and initial target of bear-s1 band.

The above is my general thought process everyday. All analysis is about where the price is with respect to the bands and what is happening when price is in a band.

More later....

[SnoopTrade]

Hi ST,

Thanks for inputs into this valuable threads and keeping it alive.

Based on this, say for example, if any system gives a Buy/Sell signal near the LOC, should we initiate a trade at all or leave it till goes towards any of the band.

Hope I am not breaking into the flow of your explanation of the method.

Regards,
mave_rick

[SwingTrader]

Hi mave_rick,

No problem, questions are welcome.

If you get a buy/sell signal around LOC it is fine to take it, but do understand that there can be significant resistance around BULL-R1 area. But yes, if the distance between LOC and R1 is significant then there is a possible trade. Better long trades are possible when you get buy/sell signals around the BEAR-S1 area. Watch for price reversals in this area, I see such reversals all the time. Vice versa for short trades.

NOTE: The buy/sell signals I am talking about above can be from any strategy. The iCharts levels are best used as supporting tools for stop loss and targets.

[ali522003]

please teach that how to place these bands or from which option? i m only getting pivot points. where i can find LOC R1 bull bear s1 all that.