SAR SUMMARY

Table 4.4 is perhaps the most important one in this book. It details how often price patterns show support and resistance, sorted by the percentage. The numbers are for bull markets only.

Table 4.4 Support and Resistance Summary

Description Effectiveness Reference
Consolidation areas showing support in straight-line runs. 69% to 85% Support in Straight-Line Runs
Consolidation areas showing resistance in straight-line runs. 69% to 76% Resistance in Straight-Line Runs
Horizontal consolidation regions showing support 55% Horizontal Consolidation Regions
Valleys showing resistance 48% to 52% Table 4.3
Horizontal consolidation regions showing resistance 41% Horizontal Consolidation Regions
Peaks showing support 39% to 46% Table 4.2
Corrective phase of a measured move up or down stopping power 35% Table 4.1
Peaks showing resistance 34% Minor High Resistance
Valleys showing support 33% Minor Low Support
Gaps showing resistance 25% Gaps Showing Support and Resistance
Round number support and resistance 22% Another Look at Round Numbers
Gaps showing support 20% Gaps Showing Support and Resistance
Tall candles do not show unusual support or resistance True Myth: Tall Candle Support and Resistance
Peaks with below average volume show more resistance True Volume at Minor High Resistance
Valleys with below average volume show more support True Volume at Minor Low Support
Support gets stronger over time True Table 4.2
Strength of overhead resistance ...

Get Trading Basics: Evolution of a Trader now with the O’Reilly learning platform.

O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.