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False Break of Support & Resistance
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Created: by liorzuk Attachments:15

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False Break of Support & Resistance

  #31 (permalink)
Trading for Fun
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Big Mike View Post
What indicators/tools/packages are you using here in this chart?

Mike

Hi Bigmike,

Are the gomi indicators but i don't use it and this charts are not mine. They are from an elite member (friend) who i demand to send me for explain a little better the question asked. I know that here many elite members are using this and i was thinking to use this examples for better understanding becasue they are very visual.
My friend is encourage me for to become an elite member and i'm thinking about it. I don't use this indicators, because i'm a happy jigsaw customer and don't look at charts when i'm trading
Finally what you need is to see buy sell activity for to know the play, doesn't matter what indicator you use

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  #32 (permalink)
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ofatrader View Post
Hi Bigmike,

Are the gomi indicators but i don't use it and this charts are not mine.

Stop posting charts that are not yours, especially with Elite indicators on them since you are not an Elite Member. It would almost seem as if you are using the indicators, which will get you banned and also get the member who shared them with you banned.

Mike

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  #33 (permalink)
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My intention were to be helpful, but you are right, there are a lot of images on the web showing gomi indicators and i was thinking that using images was not wrong, not well thinking to my side. I will stop to doing that. if i write more on this topic, that i would like to do it i will use the jigsaw tools for explain new things that can be helpful
Thank's for your advice


Last edited by ofatrader; January 26th, 2014 at 07:37 PM.
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  #34 (permalink)
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ofatrader View Post
My intention were to be helpful, but you are right, there are a lot of images on the web showing gomi indicators and i was thinking that using images was not wrong, not well thinking to my side. I will stop to doing that. if i write more on this topic, that i would like to do it i will use the jigsaw tools for explain new things that can be helpful
Thank's for your advice

I think it would be interesting to see those charts

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  #35 (permalink)
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Peter Davies has posted a webinar on using intra day volume profile that speaks about the concept of where buyers and sellers are lurking, S/R breakouts and strategies to play the action. I think it expands on what ofatrader was trying to say but using volume profile instead of a footprint chart.

Video - Day Trading Without Charts - Part 1 - Jigsaw Trading

Video ? Day Trading Without Charts ? Part 2 - Jigsaw Trading

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  #36 (permalink)
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liorzuk View Post
Thanks for all of you that replied to me but i still doesnt received a satisfactory answer to recognize when its a break and when its a false break.

Things to consider: 1) time of day 2) volume 3) news 4) other contextual items

Let me direct you to a perfect example from Friday using your favorite, the spoos. After the big down day on Thursday, if you've watched indexes for a while you should have had a pretty good idea that we would gap down on Friday. Well, you check the action Friday morning, and we are down pretty big. At 7am you see an attempt to push back into Thursday's range, with no success. Again at 7:40, and again turned away. Finally, just before 8:30 you see it, and this time it punches through.

What is going on here? Answer these questions and you will have a good idea about the break above resistance (Thursday support) at the 1814.

1) Does the market really want to be up, or down? Asked another way, is the mood basically bullish, or bearish?

2) On that 3rd try which broke 1814 and broke Thursday's low, about 6,000 contracts traded in a 20 second or so period, with most of that volume (4.5K or so) being done at the offer. Who do you suspect is buying?

3) Even if we open inside Thursday's range, do you suspect based on your experience that informed buyers will all jump in here, and that sellers will not at least test Thursday's low? If you answer is 'yes,' then you are not very experienced and can take this as a learning opportunity to get to know the ES. If you answer 'no,' then it is clear that you understand that jumping to buy above 1814 premarket, with limited liquidity, is probably not the best way that an informed buyer would want to get the best prices.

Assuming you are not lazy and don't want the answers given to you (I don't have them anyway), open a chart, look at it, and answer the above questions, and maybe it will make sense. If you are lazy and do want the answers given to you, then don't be surprised if you chase your tail while you look for a one-size-fits-all answer to the question "how do you tell if a break of support or resistance is fake or real?" In short--it's not easy, nothing always works, and you have to be willing to trust yourself, whether you go with the break, fade the break, or do nothing and look for something else to trade. However, thinking through what's going on (the context) will likely give you an edge over someone else who excitedly buys/sells, or who stubbornly fades, a breakout, with not much thought put into it.

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  #37 (permalink)
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This is my final example trying to ask the question and showing that finally doesn't matter the area you are looking, what you need to find is buy or sell interest. This is very difficult to be teached because there is no exclusive patterns, my personal recomendation is that you spend time at your screen looking buy sell orders and learn to read it

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here you can find more info about it

https://futures.io/traders-hideout/23779-day-trading-support-resistance-levels-e-mini-s-p500-futures.html


Last edited by ofatrader; January 27th, 2014 at 04:49 AM.
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  #38 (permalink)
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Hi,

this is a perfect example where we can look for to find if we see somenthing interesting for to know if a break can be false or not. We can discuss about this example

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Like you know i will look at buy sell activity but a lot of traders maybe can have other methods for to know this, and can be helpful that someone who wants discuss his reasons for to see this area like a false breakout or not

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  #39 (permalink)
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ofatrader View Post
Hi,

this is a perfect example where we can look for to find if we see somenthing interesting for to know if a break can be false or not. We can discuss about this example

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).


Like you know i will look at buy sell activity but a lot of traders maybe can have other methods for to know this, and can be helpful that someone who wants discuss his reasons for to see this area like a false breakout or not

Hello "ofatrader"

This is a classical case of false break and i will be glad if you explain your way to identify the false break on it

Thanks


Last edited by liorzuk; January 28th, 2014 at 07:42 AM.
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  #40 (permalink)
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My indicator prevents me getting into false breaks, i take the highest offset for entry (check the dotted line, it almost hit). Also the orderbook gives you some ideas where to place your entry... ;-)
This is FDAX btw.

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