Understanding Support Resistance Levels Thinkorswim

Thinkorswim is a powerful trading platform that allows you to visualize and analyze support and resistance levels in a variety of ways.

To start, let's define what support and resistance levels are: they are areas on a chart where price has historically had difficulty breaking through.

Thinkorswim's charts display support and resistance levels as horizontal lines, making it easy to identify these areas.

By understanding where price has historically struggled, you can make more informed trading decisions and develop a more effective trading strategy.

You can use ThinkOrSwim's Volume Profile to identify key levels of support and resistance. This tool helps you visualize the trading activity and identify areas where buyers and sellers are most active.

ThinkOrSwim Volume Profile Trading Strategies can be used to identify areas of high trading activity.

Volume Profile is a powerful charting tool that can help you analyze the market and make informed trading decisions. By adding the "Volume Profile" study to a Thinkorswim chart, you can specify the time period and price range for analysis.

The Thinkorswim Volume Profile tool allows you to analyze the volume traded at different price levels over time. This can help you identify key support and resistance levels in the market.

Volume Profile can also be used to analyze market sentiment and identify potential trading opportunities. Traders can use this tool to identify areas of accumulation or distribution in the market.

Here are some key features of the Thinkorswim Volume Profile tool:

By using the Thinkorswim Volume Profile tool, you can gain a deeper understanding of the market and make more informed trading decisions.

ThinkOrSwim Trading Strategies often involve using custom indicators to gain a trading edge. The Previous Day Close Line indicator is a useful tool for traders who want to analyze price action over a specific time frame.

This indicator can be created using ThinkScript, a programming language used on the ThinkOrSwim platform. The script for the Previous Day Close Line indicator is available online and can be easily applied to a chart.

The script draws a horizontal line at the high, low, open, and close prices of the previous day. This line serves as a support or resistance level, helping traders identify potential areas of price congestion.

To customize the indicator, traders can adjust the aggregation period, length, and displacement of the line. The aggregation period determines the time frame over which the indicator is calculated, while the length and displacement settings control the number of periods used to calculate the line.

The Previous Day Close Line indicator can be used in conjunction with other technical indicators to confirm trading decisions. By analyzing the interaction between the indicator and other market data, traders can gain a better understanding of market trends and make more informed trading decisions.

Support and resistance levels are crucial for traders to determine the direction of a stock's price movement. They can be seen as price levels where the market has historically had trouble moving past.

The chart volume profile is a useful tool for checking longer-term support and resistance levels. It displays the volume profile across the entire chart's history, helping to identify areas where the market has had significant trading activity.

The chart volume profile can account for all the volume traded within a specified time period, such as a year. This provides a broader view of support and resistance levels compared to intra-day levels.

However, it's essential to note that the chart volume profile doesn't reveal whether there are more people short or long at a particular price level.

Pivot Points is a study that provides three key support and resistance levels using daily, weekly, or monthly timeframes. It's a useful tool for traders to analyze market trends and make informed decisions.

The pivot point is the average of the high, low, and close prices of the previous period. This calculation is crucial in determining the support and resistance levels.

To calculate the support and resistance levels, we need to understand the following table:

Pivot Points uses a different approach to determine weekly and monthly timeframes compared to Persons Pivots. It counts the periods back from the last day, which means pivot levels are different each day.