Calculate resistance / support on 5 minutes timeframe

[mapapuche]

I'm starting to learn resistance / support.

I'm trying to calculate it, but i'm not sure to understand something.

Let say i have an array of 5 last trades done (i can have much more, it's just for the example) : `[[1611965400000, 107.145, 107.434, 107.0, 107.029, 230.9], [1611965700000, 107.033, 107.182, 106.714, 106.73, 490.3], [1611966000000, 106.708, 106.834, 106.524, 106.545, 390.3], [1611966300000, 106.603, 106.626, 106.038, 106.154, 597.3], [1611966600000, 106.145, 106.311, 106.037, 106.188, 462.9]]`

Here what value is equal in my array of data:

    [
        [
            1504541580000, // UTC timestamp in milliseconds, integer
            4235.4,        // (O)pen price, float
            4240.6,        // (H)ighest price, float
            4230.0,        // (L)owest price, float
            4230.7,        // (C)losing price, float
            37.72941911    // (V)olume (in terms of the base currency), float
        ],
        ...
    ]


To calculate the pivot /support / resistance i have to do that :

     pp = (high + low + close) / 3
     r1 = 2 * pp - low
     s1 = 2 * pp - high

But, for high / low / close, should i take the average of all my data in array? or should i take only the last element ? or should i take the highest for the high, the lowest for the low, but what for the close ?

Thank for your help !

[NotATether]

If you had data for just one day and you wanted to calculate support and resistance levels with a granularity of just one day then you can use the high/low/close data for that day as input.

But let's say you had a whole trading interval that lasted for 7 days for example. Then that week will also have an open/high/low/close of its own. The open and close points are for the beginning and end of the week respectively, high is the day in that week it was at its highest, and you get low similar to how you get high.

Same thing if you had intervals lasting one month, one minute, one hour, 3 hours, etc.

In this case, your interval is 5 days so just take the opening price of the first day (107.434), the closing price of the last day (106.188), the high for the day that has the biggest value (day 1 107.434), and the low for the day with the smallest value (day 5 106.037) and use those in your calculations for the pivot point, support and resistance.

You get pivot point pp = 107.43 + 106.037 + 106.188) / 3 = 106.551666667 (keep the extra decimal points when doing the intermediate financial calculations in finance so you don't lose accuracy).

The 1st resistance r1 is 2*106.551666667 - 106.037 = 107.066 , while the 1st support s1 is 2*106.551666667 - 107.434 = 105.699. 2nd and 3rd resistance and support can be calculated similarly.

These numbers are for a 5-day interval because you gave it data spanning 5 days. It works even if you give it data for each hour that spans a total of 5 days; just take the biggest high and smallest low of each entry, and the opening of the first entry and the closing of the last entry.

[tranthidung]

Please wipe out the misleading term support/ resistance, especially if you are dealing with too short time frame. Even with longer time frames, they can not be true at all as at some decisive time-points, resistances and supports will be flipped.

If you are a coder, and you want to code for your automated trades, pay your attention on liquidation price on the market. I am not going to details and you have to find them on the chart. As a trader, charts are the first place you look at and find lovely targets or traces of past trades. Liquidations are shown on charts definitely.

If you would love to trade with 5-min timeframe, let's go with this chart and find how shorters or longers were liquidated. It will be the price for you to enter/ open or exit your positions. Spots or leverage positions, it depends on you.

Make sure you zoom out the chart with bigger timeframe and won't  be obsessed with 5-min charts all the time. If you won't zoom out, you will be trapped. Trade with 5-min chart, but zoom it out regularly.

Note: if you are hunting for liquidated price, you would be cautious of liquidation risk than those guys and would use a safer leverage. Of course, it is best if you use Spot trading to hunt them.

[bassbity]

try to use a zigzag indicator in combination with some indicators such as the Bollinger Bands. maybe it will be enough to help read the movement in 5 minute terms. You will see where it leads to Bollinger Bands help.

good luck.