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Is Support and Resistance Meaningless?
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Is Support and Resistance Meaningless?

  #11 (permalink)
Trading Apprentice
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grausch View Post
wallo101,

What did you think of the market's action yesterday? Have you found any support that held? I think that anyone hoping that support would hold, got burnt a little yesterday.

If you are truly looking for something better, please refer to the last two points in tigertrader's post.

https://futures.io/index-futures-trading/13452-es-s-p-500-futures-contract-sp500-spoo-nalysis-1999.html#post513727

That gives you quite a bit of insight into his edge, namely when he is right he likes to have size on a trade, and he does not take profits merely because he has them. He likes to ride them for as much as he can get. Now, that is what I call a true edge.

If all you are right to do is find a way to increase your winning %, then you are only looking at one part of the puzzle and missing the big picture. Getting 50 ticks profit on 10 or 20 contracts, can pay for a lot of 10 tick losers on 1 or 2 contracts. Even with a 20% win percentage, you should still make very good money.

I'll read that thread after i wake up later (about to go to sleep). I read on a site called learncurrencytradingonline that some of the best traders in the world win 30-50% of the time but win huge and lose small.

I'm going to start a thread on recommended books.

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  #12 (permalink)
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wallo101 View Post
I read on a site called learncurrencytradingonline that some of the best traders in the world win 30-50% of the time but win huge and lose small.

After the words "some of the best traders" there's actually a huge variety of percentages you could put into the rest of that sentence, and it would still be true.


wallo101 View Post
I'm going to start a thread on recommended books.

We have one, thanks: https://futures.io/traders-hideout/8-some-highly-recommended-books.html

Please excuse my adding to the chorus of other members in some of your threads asking why you're starting off so many threads here, and just offering my respectful suggestion that reading some of what's already here may perhaps be more helpful to you, Wallo.

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  #13 (permalink)
Trading Apprentice
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You'll figure it out when you inquire as to why it was historically referred to as Supply and Support, not Resistance and Support. When there is massive Supply to the downside, where do you think "support" will occur? Answer...only where it proves to appear. It's all reaction until it proves to be action. Additionally, I wouldn't predicate "support" on volume...because volume largely lags valid turns in the market. Base it on price action and then only risk based on whole number moves like $1 $3 $10...or whatever floats your boat (Wyckoff method of risk mitigation). If you're looking at a point and figure chart using those settings and the red is very long indeed...it may not be a time to guess about support, but let it play out.

Just my two cents.

Oh, and that would be a traditional point and figure chart(s) based only on price, not ATR.


Last edited by Smalltime; August 22nd, 2015 at 09:04 PM. Reason: addendum
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  #14 (permalink)
Market Wizard
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wallo101 View Post
I've been watching charts the past week and notice the market does not respect support/resistance and will break through it more often then not. There's got to be a better way to trade and i'm not finding it. Order flow seems to make the most sense right now (i'm not saying it makes sense to me yet, just more sense then trading stuff like support and resistance), but i'm currently looking at charts.

Support and resistance are not meaningless, but it is usually foolish to draw a level and expect it to simply hold. The levels on charts show possibilities, not something that is an absolute. You have to see what price does when it gets there. The level you have selected can tell you something important, if price respects it, and also something else if price just passes through it. But "support" and "resistance" are just reference points, not some kind of brick wall. You need to interpret potential future price action based, in part, on whether they are respected or not. By the way, in general potential support and resistance do not hold, so you just want to have a heightened awareness to pay attention to price action when these possibly significant levels are approached. The entire subject of price action trading is kind of involved, and may take more work, but that is a start on it.

----------------

On another front, I noticed that you are now among the top recent new thread creators on futures.io (formerly BMT). (You have created more new threads than I have, after over 1,700 posts.) That is not a bad thing in itself, but geez, could you just learn how to use the search function? There is a "Search" box at the top of every page, and you could try out some of the search possibilities there.

Every single thing you have made a new thread about has been covered somewhere else already. It might make your journey simpler if you just started to read -- and ask questions on -- the threads that already exist. There's a whole lot of material there, and not everyone is going to bother to respond to a new thread on an old topic, so you are losing out by ignoring what has been previously discussed.

Not meaning to be critical, although it may sound like it. It's just that there's already a wealth of stuff here that could help you, if you look for it.

Good luck anyhow, however you pursue things.

Bob.

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  #15 (permalink)
Normal Wizard
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when things get very volatile pay attention to the higher time frame support-resistance levels. The smaller ones will not be very respected.

Understanding yourself is just as important as understanding markets.
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  #16 (permalink)
Market Wizard
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TickedOff View Post
when things get very volatile pay attention to the higher time frame support-resistance levels. The smaller ones will not be very respected.

Good point. You need a context of what is happening on an overall basis, and from a larger perspective.

Bob.

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  #17 (permalink)
Trading Apprentice
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I'll admit i got kind of offended and mad, but a big part of why i got mad is because i know you're right, i should've used the search function more.


bobwest View Post
Support and resistance are not meaningless, but it is usually foolish to draw a level and expect it to simply hold. The levels on charts show possibilities, not something that is an absolute. You have to see what price does when it gets there. The level you have selected can tell you something important, if price respects it, and also something else if price just passes through it. But "support" and "resistance" are just reference points, not some kind of brick wall. You need to interpret potential future price action based, in part, on whether they are respected or not. By the way, in general potential support and resistance do not hold, so you just want to have a heightened awareness to pay attention to price action when these possibly significant levels are approached. The entire subject of price action trading is kind of involved, and may take more work, but that is a start on it.

----------------

On another front, I noticed that you are now among the top recent new thread creators on futures.io (formerly BMT). (You have created more new threads than I have, after over 1,700 posts.) That is not a bad thing in itself, but geez, could you just learn how to use the search function? There is a "Search" box at the top of every page, and you could try out some of the search possibilities there.

Every single thing you have made a new thread about has been covered somewhere else already. It might make your journey simpler if you just started to read -- and ask questions on -- the threads that already exist. There's a whole lot of material there, and not everyone is going to bother to respond to a new thread on an old topic, so you are losing out by ignoring what has been previously discussed.

Not meaning to be critical, although it may sound like it. It's just that there's already a wealth of stuff here that could help you, if you look for it.

Good luck anyhow, however you pursue things.

Bob.


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  #18 (permalink)
Market Wizard
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wallo101 View Post
I'll admit i got kind of offended and mad, but a big part of why i got mad is because i know you're right, i should've used the search function more.

It's hard to write something like I did and not cause some offense, and I apologize for that. It's not how I meant it.

But yeah, the search will work wonders for you.

Take care and good luck with it.

Bob.

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  #19 (permalink)
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wallo101 View Post
I'll admit i got kind of offended and mad, but a big part of why i got mad is because i know you're right, i should've used the search function more.

If that got you offended and mad, just imagine the roller-coaster emotions that the market can subject you to.

Keep you leverage low and gauge how market movements affect you. I tend to be quick to realize when I am trading too large and most of the time my ideal exposure is <50%. Yours will of course be different, but it is important to know when your emotions are affecting your trading. Only experience will help with that.

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  #20 (permalink)
Trading Apprentice
Kalamazoo, MI
 
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Posts: 17 since Jul 2015
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I'm waiting for the Market Wizards Book, i'm also going to be getting a beginners book on investing and economics (there isn't one book on amazon that doesn't have at least one one star rating).

I wonder; are there any traders that are successful like the ones interviewed that use candlestick formations and patterns, price action? Order flow sounds decent, but you need a bigger account size i believe to start with that.

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