Actually, there may be some truth to that. If you draw your s/r lines using several different methods, and you end up with an area where multiple lines from various methods cluster together, most will consider that a stronger s/r confluence area.
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OK, I probably should not share this secret here, but since you are sooooooo close....
When you draw support and resistance, always do it with THREE lines. Of course the last one is thickest, and obviously you understand why. But I find it helps tremendously to have the other two in front of it, to slow the market down.
Last edited by GaryD; March 20th, 2012 at 04:07 PM.
Reason: what is wrong with me and my typing ability
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Advanced and Big Mike.....since your a channel trader maybe you will chime in and answer my post #60 in this thread. Ive attached a chart that has channel lines in red, yellow are old res/support looking left. Whats your thoughts on my question in my last post. Many thx I understand they will be alot of different views on this but I am open to all
The time frame you draw channels and TL's on is going to be dependent on the time frame you trade. For example I am mostly trading the ES off 60 minute charts these days (as my smallest chart), and I use a 240m (4H) and Daily chart in addition to draw channels and TL's.
With regards to post 60, I do not use any moving averages whatsoever any longer. Not even VWAP. I do not use any Fibs whatsoever. I do use support/resistance where I find it, basically you can use a nice sized ZigZag and where the market turns you can extend a horizontal line to the right until price penetrates that area. Sierra Chart has an indicator that does this for me, so I use it, but you can do it manually.
I do have Volume Analysis on my chart to see the value area, volume point of control, and the volume distribution of each day. I tend to be a support/resistance trader, so I am always looking for a reason to enter or exit in terms of prior support/resistance. You can use prior zigzag, you can use channel TL, you can use VPOC, or whatever works best for you (or all the above) to find these areas.
But keep in mind, it will be very dependent on your trading style, and even more dependent on your trading time frame. If you are trading a smaller chart than me, then you will likely have a much harder time holding the trade to one of these S/R areas that I hold for. So you would need to adjust the methodology for your own style, and of course you would then need to extensively forward test it to find out if it works well for you before trading it cash.
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