# Tirone Levels

Tirone levels is a sequence of several horizontal levels reducing one after another. Tirone levels method is used to find Forex support and resistance indicators within trading range in a particular period of time.

Tirone levels were elaborated by John Tirone. In practice, TL makes reading charts of the price movement easier. Also using this method of technical analysis traders can generate signals for opening positions. For example, if the price reaches TL from upward it is a buying signal. If the approaches from bottom it is a selling signal.

There are two options to calculate Tirone levels.

## Midpoint method

High and Low are defined for a particular period of time.

The formula to define the upper line of TL is:

### Tirone Level 1 = Hhigh I – (Hhigh-Llow)/3

where Hhigh - Highest High — High price for a particular period of time;

Llow - Lowest Low — Low price for a particular period of time;

We deduct Low from High, then the obtained value is divided into three and this value should be deducted from High.

The formula to find the central line is:

### Tirone Level 2 = Llow + (Hhigh-Llow)/2

We deduct Low from High, then the obtained value is divided into two and is added to Low.

The formula to find the bottom line is:

### Tirone Level 3 = Llow + (Hhigh-Llow)/3

We deduct Low from High, then the result is divided into two and is added to Low.

## Mean method

According to this method we put five lines on the chart. Firstly we calculate the Adjusted Mean.

where Closeis the closing price of a candle.

To find the upper line:

The second line

### Tirone Level 2 = 2 x Adjusted Mean - Llow

The Third line or Adjusted Mean

The fourth line

The bottom line

### Tirone Level 5 = Adjusted Mean - (Hhigh-Llow)

Application of Tirone levels

Tirone levels are the set of certain support and resistance level based on trade range of asset (currency, CFD etc.) for a particular period of time. More often, they are used for a more convenient reading charts of the price movement on market.

How to use support and resistance levels? Application of TL is similar to application of Fibonacci retracement. We open a long position as the price approaches TL from top and a short position as the price approaches TL from bottom.

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