Tirone Levels

Technical analyst John Tiron came up with Tirone levels: a way to determine the support and resistance of the price of an asset on line charts. Rather than working in nominal numbers, Tirone levels function based on percentages.

The Tirone levels are a series of three horizontal lines in a row. The middle line is drawn by calculating the average of the highest high and lowest low price of an asset in a certain timeframe. The top and bottom lines, around that middle line, are drawn at one-third and two-thirds of the distance respectfully. If this sounds like the quadrant lines of the Fibonacci retracement, you’re correcto-mundo.

The top line represents the resistance level: the highest price that stock will probably go for. Likewise, the low line represents the support level: the lowest price that stock will probably sell for.

Support and resistance levels are mainstay tools in almost all technical analysts’ tool belts. It’s tool time.