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Hello,
I have a query regarding the use of High and Low support/resistance levels derived from daily charts. In his course, it's explicitly mentioned that Al focuses solely on the Regular Trading Hours (RTH), which run from 9:30 AM to 4:00 PM Eastern Time.
Nonetheless, when pulling up a daily chart on any trading platform, the daily chart reflects Extended Trading Hours (ETH or Globex), suggesting that these levels are significant as well as everyone is seeing them in their daily chart.
My question centers on determining which High/Low levels from the previous day(s) should be incorporated into my intraday chart. Should I prioritize those from RTH, ETH, or consider both?
Incorporating levels from both RTH and ETH on the main intraday chart might lead to clutter due to the presence of four High/Low levels just from the previous day, making it potentially overwhelming. What's your take on managing this effectively?
Hi Ben,
Al emphasizes the importance of the RTH because that's when the volume is the highest and the institutional players are most active, hence, the price levels during RTH are typically seen as more significant. So during the day you can give higher priority to the support and resistance levels identified during the RTH. These are likely to be more reliable.
You can still observe the highs and lows formed during the ETH as potential support and resistance areas, but treat them with caution. They might not hold as strongly as RTH levels due to lower volume and less institutional engagement.
It also looks like you are mainly worried about an overcrowded chart, so you can filter levels based on their significance. If a level has been tested multiple times or has caused significant price reactions in the past, it's likely more substantial and worth including on your chart. Also to avoid paralysis by analysis, you can only mark the most significant levels from the RTH on your intraday chart, using fainter lines or different colors to denote the less significant ETH levels.
Hope this helps,
CH
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BPA Telegram Group
Helps a lot thank you.
