How the levels are calculated
How the levels are calculated
They are computed from the price range by a fixed rule. Nobody is predicting anything, and no one has looked at a chart and formed an opinion.
The short version
Take the highest and lowest price over the period. Find the smallest frame that contains that range, where a frame is a round decimal number — 10, 100, 1,000, 10,000 — optionally halved as many times as needed. Divide that frame into eight equal parts. The lines are the eighths.
That is the whole method. It takes two numbers in and gives the same answer every time. Run it twice on the same range and you get the same lines; run it on someone else's software and you should get them too.
Choosing the frame
A frame is 10k ÷ 2m — a round decimal number
divided by two some number of times. So 10,000 is a frame, and so are 5,000, 2,500, 1,250,
625, and onwards down. The ladder runs from 10,000,000 at
the top to 1/1024 of a rupee at the bottom.
The frame chosen is the smallest one that still contains the range after it has been aligned. Alignment matters: a frame is laid down starting at a multiple of itself, not at the low of the range. A 90-rupee range does not necessarily fit in a 100-rupee frame — if it starts at 995, the aligned frame runs 900 to 1,000 and the top of the range falls outside it. So the next frame up is used.
Where the lines fall
The frame is divided into eighths, and there are
13 lines in all: the eight inside the frame, plus two
below it and three above, written -2/8 through
10/8. The extra lines exist because price leaves its
frame regularly, and a grid that stops at the edge has nothing to say at exactly the moment
something is happening.
A worked example
Suppose the period's low was ₹71,850 and its high
₹72,410 — a range of 560. The smallest aligned frame that holds it is
1,250, laid from
₹71,250, so each eighth is
156.25. The lines are:
| Line | Price | Position |
|---|---|---|
| -2/8 | 70,937.50 | Below frame |
| -1/8 | 71,093.75 | Below frame |
| 0/8 | 71,250.00 | Frame floor |
| 1/8 | 71,406.25 | Lower eighth |
| 2/8 | 71,562.50 | Lower third |
| 3/8 | 71,718.75 | Lower middle |
| 4/8 | 71,875.00 | Midpoint |
| 5/8 | 72,031.25 | Upper middle |
| 6/8 | 72,187.50 | Upper third |
| 7/8 | 72,343.75 | Upper eighth |
| 8/8 | 72,500.00 | Frame ceiling |
| 9/8 | 72,656.25 | Above frame |
| 10/8 | 72,812.50 | Above frame |
A price of ₹72,180 sits in the highlighted row's eighth — between
72,031.25 and 72,187.50, near the top of it.
What makes a level stop applying
A level is only meaningful for the range it was built from. When the period's high or low changes enough to need a different frame, the whole grid moves and the old lines are gone — they are not support that has been "broken", they are arithmetic that no longer applies.
This is the honest limit of the method, and it is worth being plain about: the lines describe where the price has been. They are a way of reading a range, not a forecast of what comes next.
The Trend Indicator
Beneath the chart, the board says whether the trend is up or down and since when — for example, Trend up since 03:30 pm IST. That line is also computed by a fixed rule. The rule is called Supertrend, and it is widely published.
- The shop's rate is grouped into 15-minute candles. Each candle records the highest, lowest and last price in its fifteen minutes.
- The average true range measures how far a candle typically moves. It is averaged over the last 10 candles, smoothed the way its inventor, J. Welles Wilder, defined it.
- Two bands are placed around the middle of each candle: 3 times that average above it, and the same distance below.
- The trend is up while the price closes above the lower band, and turns down only when a candle closes below it. It turns back up only when a candle closes above the upper band. The bands only ever move towards the price, never away from it, so a small wobble does not flip the trend back and forth.
- Since 03:30 pm is the candle on which the direction last changed.
It looks back over the last 3 days of candles. With fewer than 12 candles to work from — a board that started this morning, say — it shows nothing, rather than a trend it cannot yet support.
The settings, 10 and 3, are the conventional defaults for Supertrend. They are not tuned to gold, to this market or to recent prices. Settings picked because they would have fitted the past are a backtest, not a rule.
Like the levels above, it describes where the price has been. It is not a forecast, and the trend being up does not mean the price will keep rising.
What this is not
- It is not advice, and it is not a recommendation to do anything.
- It contains no opinion. No analyst has reviewed it, and there is no view being expressed about which way the price will move.
- It uses no private data. The only inputs are prices this board has already shown — a high and a low for the levels, and the last few days of the shop's own rate for the trend.
- The lines do not become more likely to hold because they are drawn. Prices are not obliged to respect arithmetic.
Rates and levels shown on this board are for information only. They are not investment advice, not a solicitation, and not a recommendation to buy or sell anything. Prices move; a figure shown here may not be the price at which any transaction is available. Confirm with the jeweller before acting on anything you read here.