The rule about support becoming resistance when broken was true today.
Price meandered down out of the upper zone, broke resistance 1 and to the tick to the resistance 2. Back up to resistance 1 and down to resistance 2 for a couple of bars and the the third time was the charm. Through resistance 2 down to the lower zone. Up / down / up down the rest of the day from resistance 2 and the lower zone.
The day didn't break out of the resistance lines until after I went to work. After resistance 2 broke the market moved to within a few ticks of the bottom of the lower zone. Up to res 2, down to top of lower zone, then all the way up to the bottom of the upper zone. Nice. I hope someone caught that run. That was a 10 pointer
I wish I could have stayed around to trade longer today. Only a few points within the range before I had to go to work. But the lines and bands did their job today. Picture attached and it speaks for itself.
Open was right down to the Res 2. Then back up to Res 1. A retracement that didn't take us to Res 2 so it was likely Res 1 was not going to hold. Punch through Res 1, held, then on up to 2 ticks to the top of the upper zone. Back down to within 1 tick of Res 1.
Then FOMC news. But notice how it still respected the areas we marked this morning. Nice
The indicators are the constant line / constant zone from the downloads, which I update everyday before the NYSE open.
The blue lines are based on my view of support and resistance from the overnight session or something that is obvious from prior days, i.e. a cluster of turning points. The zones are just + / - from the blue lines. I'm playing around with the distance from the blue lines as part of this exercise.
I post these before NYSE just to help me understand where important price areas are going to potentially be for the day. I do not have a trading plan for these yet. Post 1 describes why I am doing this, which is to help me understand support / resistance and that (1) price returns to the same areas and (2) price likes to extend those areas at some point (stop running by the professionals).
Oh, and I agree. I'm beginning to like horizontal lines better than moving / averaging indicators.
I'm going to develop a plan to use these at some points. My day job keeps me way too busy right now. Conference calls at 7AM tomorrow will make the trading morning shorter than normal. Bleh! But the day job pays the bills while I'm learning to trade. So really I shouldn't (but I love to) complain.