My take on this is that sometimes levels hold and sometimes they do.
If enough people trade the level, then people jump on board and it perpetuates the move.
S/R levels themselves attract a lot of retail traders and as such are areas that will be gamed. So I think they are poor areas to take a trade but they are area where a reaction can start. So for me - if a reaction starts at a key level, I will be happy to change my bias to that direction.
I don't really care if a level holds or breaks - just that people appear to be jumping on board.
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The following 2 users say Thank You to DionysusToast for this post:
I think that pretty much sums it up. If you have a hard entry, you're gonna get burned by those pokes above and below S&R. It's best to wait and see if you have others piling on before jumping in and riding the wave.
The following 2 users say Thank You to bigdaddy for this post:
Here's an example of a level that didn't hold, since price didn't touch the support and bounced around above the level I took my chances that it was going to get hit. If your reward outweighs your risk you're doing a good job.
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A long could have been made after the level was hit too *, that's another play ( I did not take )
The following 2 users say Thank You to Itchymoku for this post:
yeah i saw that, I mean it's all over, and when it's not there it's usually a result of people, or programs, playing the odds that too many people have caught onto it and thus are now trying to hit the levels they think the new stop would be of the traders who are entering at the s/r. It's a never-ending game of duck duck goose. This is why many traders think it's meaningless is because it's not straight forward whatsoever, there's added layers of complexity to it.