QuoteDislikedIs there any proper research done to prove if this is true ? Can you post a link where such research study has been done ?
Yes, please see the PDF attached.
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You can read here that this researcher compared the results of arbitrary levels to levels provided by institutional funds and firms trading in the Forex market. Her findings concluded that the levels provided and used by these firms were in fact more accurate in predicting price direction when compared to random points on the chart. That is just one research report though I am sure there are more you can find doing your own research.
QuoteDislikedIf this is true as you claim then this is the basis where a edge naturally exist on the chart where reverse or bounce occurs more often then on any other random spot on the chart.
Well, yes but it is only a part of my edge personally. I do not think its worth it to simply only trade based off of these zones even if you may be right slightly more than 50% of the time, that's just not good enough. It is only a part of a good trade and you should have other reasons to enter a trade if you want to increase your chances of profiting from that trade.
QuoteDislikedThe point I try to make is the drawn lines represent YOUR BELIEVE.
Yes, and no. Technically those lines represent the belief of other traders buying and selling at those areas, that's why I can see them. It is however up to me to agree with that area and believe it will work again, but that's why I said used alone they are not going to give you a significant edge.