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The single most important chart in your setup, and why
Trading: Index and Stock options, Stocks (seldom), Nadex (just starting), Forex
Posts: 33 since Oct 2012
Thanks Given: 47
Thanks Received: 26
For those of us using bands based on moving averages Range charts provide a smoother more granular chart. Of course problems come when the market is moving to fast for you to trade it. The attached chart shows a 20 tick range chart (for day trading the /NQ). It includes a price/donchian channel length 50. It includes an indicator at the bottom that shows the candles / minute or the minutes per candle for avoiding the temptation of jumping into the market when a feeding frenzy is going on. It includes some bands and a midline for mid cross entries or outer bands for breakout entries. It also can use Candles with Red or Green arrows in them. Two reds in a row, go short, two greens in a row go long and two opposite or blank candles (no arrow) get out. I like a simple looking chart that gets my head out of the "what will the market do" thinking. The green part of the chart shows the current floating profit loss both for the chart length (5 days in this case) and for the current day. (single contract results but this can be changed as desired)
There were almost 100 point swings several times even 30 minutes before close there was one more ended the day recovering the downturn. Pretty much the market found support at almost 100 points down SP and it always bounced back. However it hit resistance at probably down 25 points, one has to have strong stomach to short it there because the market again would touch support again at negative almost 100 points, cover it (that’s easy) and then wait to hit the resistance again and do it all over again. If the bias is positive then you can always buy at support but shorting at resistance requires experience and strong stomach to ride out if the position turned sour (which didn’t happen yesterday).
Disclaimer: I am not a trader and even if I were I could never trade that chart. My indicators are not that perfect. I don't even look at the market during trading hours and I make it a point, and only look at chart at end of day.
Even if you are not a trader, you made the appropriate observation about support and resistance. You do not need any other indicator if you fully understand the concept of support and resistance. And, I do not think that there is any difference in doing bullish trades than bearish trades as long as you have the exact same predefined risk going into the trade.
