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Mapping One symbol's Support/Resistance to another Symbol

I wish to map and display the Support/Resistance lines (i.e. SMA20_daily) of ES onto NQ graph as I think they are mutually effecting each other, how may I achieve this? Do I need to do some kind of normalization?

For example, I have a SMA20_daily of ES, is there anyway I can ‘map’ this support/resistance line to the NQ chart, so that I can see the SMA20_daily_ES on my NQ chart, therefore plan an entry/exit of NQ? (i.e. If I believe when ES touches this line, it will reverse, than I can plan to do reversal strategy on NQ, as NQ is the symbol I wish to trade)

I have tried using simple ratio method, but it didn’t produce the correct mapping. 🙁

Price of SMA20_daily_ES on NQ Chart = (Price_NQ/Price_ES)*(SMA20_daily_ES)

Any advices will be awesome.

Thank you guys!

Quantitative Finance Asked by rc76 on February 4, 2021

1 Answers

One Answer

Maybe take the log ratio?

log( Price_ES / SMA_ES ) == log( Price_NQ / ES_equiv_SMA_NQ )

simplify and set

log( Price_ES / SMA_ES ) = X

where X is just a known constant, and then substitute and rearrange

ES_equiv_SMA_NQ = Price_NQ / e^X

Answered by babelproofreader on February 4, 2021

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