Chapter 2 CloudCraft proprietary tool
What is Key Levels®?
Multi-timeframe composite support/resistance levels
What is Key Levels®?
Key Levels® is a proprietary Cloud Craft module that automatically calculates support and resistance levels from 6 different timeframes (Yearly, 6-Month, 3-Month, Monthly, Weekly, Daily). A level is automatically invalidated once price tests it.
Timeframe | Label | Kullanim
12 Months | YEARLY | Macro structural levels
6 Months | 6M | Semi-annual equilibrium zone
3 Months | 3M | Quarterly trend levels
1 Month | MONTHLY | Swing trade references
1 Week | WEEKLY | Weekly action levels
1 Day | DAILY | Intraday trade levels
Timeframe | Label | Kullanim
12 Months | YEARLY | Macro structural levels
6 Months | 6M | Semi-annual equilibrium zone
3 Months | 3M | Quarterly trend levels
1 Month | MONTHLY | Swing trade references
1 Week | WEEKLY | Weekly action levels
1 Day | DAILY | Intraday trade levels
Why does Key Levels® matter?
Support and resistance are zones where price has previously stalled or reversed; in general technical analysis they are called key levels. There is academic evidence that they matter: Federal Reserve Bank of New York economist Carol Osler found that support and resistance levels published by six firms for currency markets in 1996-1998 were quite successful at predicting intraday trend interruptions, and that this power lasted at least five business days (Osler, 2000).
One reason is order clustering: take-profit orders cluster at round numbers, while stop-loss orders cluster just beyond them (Osler, 2003). When price reaches these zones, waiting orders get triggered.
Key Levels® applies this general idea automatically across six timeframes. How the levels are selected is a proprietary method and is not described here.
One reason is order clustering: take-profit orders cluster at round numbers, while stop-loss orders cluster just beyond them (Osler, 2003). When price reaches these zones, waiting orders get triggered.
Key Levels® applies this general idea automatically across six timeframes. How the levels are selected is a proprietary method and is not described here.
How does Key Levels® appear in the CloudCraft terminal?
Key Levels are displayed as labeled horizontal lines on the chart. Each level shows the timeframe label (YEARLY, WEEKLY, etc.) and type (SUPPORT/RESISTANCE).
How to use Key Levels®?
Confluence Trading: When key levels from multiple timeframes converge in the same area, a confluence zone forms. The probability of price reaction increases in these zones.
Invalidation: If a Key Level has been tested (price passed through it), it is now invalid. Cloud Craft automatically detects this and removes invalidated levels.
Invalidation: If a Key Level has been tested (price passed through it), it is now invalid. Cloud Craft automatically detects this and removes invalidated levels.
Pro tip
If a Key Level + nPOC converge in the same price zone, a confluence point where two different data sources point to the same level is formed. The probability of price reaction increases in such zones. Monitor both indicators together.
Sources
- Carol Osler. Support for Resistance: Technical Analysis and Intraday Exchange Rates (Federal Reserve Bank of New York, Economic Policy Review, 2000)
- Carol Osler. Currency Orders and Exchange Rate Dynamics: An Explanation for the Predictive Success of Technical Analysis (Journal of Finance, 2003)
The internal calculation methods of CloudCraft proprietary tools are trade secrets and are not disclosed here; this page explains what the tool measures and how it is used. This content is for education and analysis only, not investment advice. Market tools offer probability and context, not certainty; the decision is the user responsibility.