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Support and Resistance


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Support and Resistance

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  #1 (permalink)
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Ok for all your Elite Members who have been here a while.

Who do you think has the best Support/Resistance indicator?

And why?

There are a lot, and I mean a lot of SR indicators.....but most of the ones I've seen have an average performance, meaning about 50-50.

Sometimes I feel that if you put up a 5 minute chart of anything, and just draw a bunch of completely random horizontal lines......you're trading results are about the same as any expensive indicator.

Post your thoughts.

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  #3 (permalink)
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SpyderTrader View Post
Who do you think has the best Support/Resistance indicator?

Why indicator? S/R is what you (and more important: the majority of traders) see on a chart. Just draw the lines/zones.


SpyderTrader View Post
There are a lot, and I mean a lot of SR indicators.....but most of the ones I've seen have an average performance, meaning about 50-50.

I don't understand that "performance*. S/R does tell you that you have to watch what price is doing there. And you should act according to this.

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  #4 (permalink)
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Fibonacci retrace works great for me regarding support and resistance zones...
But draw your trend lines, that's all what you need. And max, you can watch the volume by price.

Major Pivot/Turning points, gap windows and gap fills are also considered good levels. Moving averages are good levels too. But there are rules for these levels, usually only the first bounce or two are valid, the rest are more prone to pierce through and breakout.

To increase your performance, you shall always enter your position very close to a level obviously, thus your stop will be very tight and your risk/reward ratio optimized. But not all levels are good, especially if they were tagged previously short term. So judge carefully

Finally, watch for topping and bottoming tails, they are generally good levels when they are at the very top or bottom of the chart respectively.

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  #5 (permalink)
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Knowing what and where support / resistance levels or areas are is an art not a science . Using indicators to define these levels deadens your ability to detect how price will react to them . You owe it to yourself to take the time and effort to learn how to first define and then exploit SR . That said , fractals or donchian channels are the best indis for SR .

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Existing thread on support/resistance:


And of course, the ultimate indicator - price:


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  #7 (permalink)
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I believe in manually drawing S/R lines based on recent and sometimes not recent price action (if outside of your current charts range).

One example:




Look at price bang against .43 and then move down. I draw a line there to draw attention to this price point. About 30 minutes later, price returns, trades 1 tick above, and then closes low with some speed. Good time to get short. Look for signs the move down is done. One sign would be the same thing in reverse. Draw a line at .13, watch how price reacts when it gets there. Moved below a few ticks, closed high, then bounced a few times on the way back up to the resistance line we have from before. So, will keep an eye out here.

There is now a triple top there at .44 in play, but I would rather have a break and then a sign we are moving down again personally. And, we may be in the start of another push back to 60s from the 20s here. I am flat at the moment.

Hope that may give you a new thought on S/R possibilities.

Gary

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  #8 (permalink)
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Gary View Post
I believe in manually drawing S/R lines based on recent and sometimes not recent price action (if outside of your current charts range).

One example:




Look at price bang against .43 and then move down. I draw a line there to draw attention to this price point. About 30 minutes later, price returns, trades 1 tick above, and then closes low with some speed. Good time to get short. Look for signs the move down is done. One sign would be the same thing in reverse. Draw a line at .13, watch how price reacts when it gets there. Moved below a few ticks, closed high, then bounced a few times on the way back up to the resistance line we have from before. So, will keep an eye out here.

There is now a triple top there at .44 in play, but I would rather have a break and then a sign we are moving down again personally. And, we may be in the start of another push back to 60s from the 20s here. I am flat at the moment.

Hope that may give you a new thought on S/R possibilities.

Gary

Well, that turned out to be a nice place to get in after all. I didn't see a place to get back in, and being so close to the pit close, wasn't eager to take a position anyway.

Have a good weekend!

Gary

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  #9 (permalink)
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@Fadi, @Eric j, @Gary



Have any of you ever added Market Profile or POC levels to filter out "strong" S/R lines and "weak" S/R lines?

Has this improved your performance, or ruined it?

This is a chart from last Friday (jobs report), you can see the many levels.
Trend, chop, trend, chop.

Just looking for something that I can add thats going to help filter out some of these entries.

I don't like trading tops and bottoms, my fave is when price smashes through a level and continues.


Around 5% move the market. 10% try to follow the 5%. The rest provide liquidity.
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Nope, I don't filter anything but I am also more of an artisanal trading if you want hehe
I follow price, pattern and time... No indicators: just moving averages.

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SpyderTrader View Post
@Fadi, @Eric j, @Gary



Have any of you ever added Market Profile or POC levels to filter out "strong" S/R lines and "weak" S/R lines?

Has this improved your performance, or ruined it?

This is a chart from last Friday (jobs report), you can see the many levels.
Trend, chop, trend, chop.

Just looking for something that I can add thats going to help filter out some of these entries.

I don't like trading tops and bottoms, my fave is when price smashes through a level and continues.


I havent found any of those to be consistently strong . Remember - every market is different and the same traders are involved each trading day in their respective markets so that in itself carries a lot of weight as to where price is going to hold . For example , the markets I trade each have a personality and one will usually see a recent high (resistance) thoroughly taken out in a bearish market before the next leg down and another will usually see price crater without much retracements to a nearby resistance level in a bearish market . Knowing your markets intimately is key .

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  #12 (permalink)
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SpyderTrader View Post
Ok for all your Elite Members who have been here a while.

Who do you think has the best Support/Resistance indicator?

And why?

There are a lot, and I mean a lot of SR indicators.....but most of the ones I've seen have an average performance, meaning about 50-50.

Sometimes I feel that if you put up a 5 minute chart of anything, and just draw a bunch of completely random horizontal lines......you're trading results are about the same as any expensive indicator.

Post your thoughts.


Personally, I like to just look at Point and Figure charts to find major support/resistance areas that price had been trading in past couple of days. Then draw lines manually on charts that I'm trading off with to make note of those areas.

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