Finding Support and Resistance from Historical Bar Crossings
Summary
The article describes a simple way to estimate potential support and resistance levels by counting how many historical bars span each price. A script scans prices from the lowest low to the highest high across a selected history window, increments a count whenever a bar’s low and high enclose a price, and exports the price-count pairs for charting. Peaks in the resulting distribution are treated as candidate levels.
The author illustrates the approach with a historical foreign-exchange example and compares several detected prices with previously identified technical levels, including trend and Fibonacci references. This is an illustrative comparison rather than a systematic evaluation: the text gives no out-of-sample results, robustness checks, or rules for turning candidate levels into trades. The price increment is fixed in the example, so its suitability depends on the instrument’s precision and price scale. The method identifies where many bars overlap a price; it does not independently validate that those prices will act as support or resistance later.
Key ideas
- Count how many bars in a chosen history window contain each candidate price.
- Scan between the observed minimum low and maximum high to build a price-frequency distribution.
- Charting the counts can reveal prices where many historical bars overlap.
- The illustrated agreement with previously noted levels is anecdotal and does not establish predictive performance.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.