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Support & resistance - Let's get creative

  • #21
  • May 18, 2021 5:51pm May 18, 2021 5:51pm
Quoting ryuryu
{quote} Hi Pete! Thank you for detailed reply. I agree with you mostly, but I criticize only fake gurus, because they are paper traders and talk nonsense. 1. He has shown the chart of 1m TF, there were no 13 years old SR levels. 2. Two of three arrows (>60%) are drawn in the past when there were NO information (no data) available yet. So what we have here? One guy start to call names after I asked him how he is so lucky to pick up exact tops and bottoms. Second one has shown paper trading with impossible drawings. But occasionally only ryuryu is...
What TimeTells said is true , he did NOT criticise you and gave a most respected view.
You were the one who plastered and criticised my first post here so stop trying to get a medal if you have not got a chest to pin it on.
  • #22
  • May 18, 2021 6:42pm May 18, 2021 6:42pm
Quoting ryuryu
{quote}
Hi Pete! Thank you for detailed reply. I agree with you mostly, but I criticize only fake gurus, because they are paper traders and talk nonsense.

Cheers ryu and peterhenders.


Guys, often on forums two traders (or more lol) end up at loggerheads which goes into a back & forth barrage of keyboard angst etc.


To be honest, a lot of uninvolved readers I reckon then just get out the popcorn (& butter) and sit back and watch our own private ‘soap opera’ for entertainment between trades.

Myself I (try and) absorb everyones OPINION and then make my own decisions as to any value add.


We are all going okay here and we post what we all reckon is a fair overview of what we “see”.


We also have whole of life traders drop in (such as PeterC) who continue to suggest that we view the markets in its biggest context. WHICH includes what happens in the global marketplace and outside (and often before) anything we see on our charts.

For example what would a chart look like if a World War broke out right at the time we have an open trade. I guess there will be some winners AND losers. As the reserve currency USD pops to the heavens, or drops to zero - for just an instant. Patterns and price charts will not mean a thing to our accounts at such a time.

Yet we (me too) choose to believe I guess that a chart ‘pattern’ is the gateway to some ‘future’ move. When we only really trade in a microcosm.

[And what about the first fish which jumped out of the water. And saw a whole new world above. I wonder how well it went taking that info back to the other fish who had only swum in water their whole lives (just joking).]


Fleshing out info on S/R from everyone who has an input allows us to see the biggest picture for our own future ideas or rejections. It allows us to see how other traders think about it AND how they trade it. So we all get another picture of what many traders might do in such situations which might help us to whether we put our own trade in NOW, or maybe a little later.


I see nothing wrong with what ryuryu posted yet I can understand how it might have elicited a response from another trader that it was directed towards, in this case peterH.

Each to their own, enjoy the day, it’s a thread topic. Have some fun folks.

all the best to all
  • #23
  • Edited 8:17pm May 18, 2021 7:32pm | Edited 8:17pm
Quoting carddard
{quote} Exactly why these "key levels" come with mixed reviews. I'm keen to explore primarily 3 areas: 1) Using S/R as high-probability zones where price bounces off 2) Using S/R as high-probability zones where price breaks out from 3) Using S/R as high-probability zones where price breaks out, retests and continues in the same direction

Your statement is the essence of the central question regarding potential support & resistance, ie whether price is going to break through it cleanly, or break- retest-continue, or bounce from it.

Any area/zone we identify on any given time frame is ' potential ' support or resistance because although price may have bounced from there before it is not a given that it will do so if tested again by price. As someone else has alluded to there are clues as to which one of your scenarios 1 or 2 may be the highest probability as someone/others have alluded to in this discussion so far. These range from how price approaches such an area/zone (a la Sam Seidon) to volume, price ladder, how many t/f's such a zone exists on, and even changes in momentum and volatility once price arrives at such, etc. There are no hard and fast answers - each trader will find their own preferred method of evaluating such and hopefully deriving a trading edge from that analysis, if trading this way. There are also no absolutes just probabilities and not every potential supp/res area/zone identified as having a hi probability of a given outcome will play out that way- such is the nature of probability.

I think it is important to note that not all potential support or resistance factors are created equal, and for me at least they carry different weighting depending on their proven large sample historical incidence of resulting in such. The confluence of potential supp/res factors can be important too and higher in probability of a bounce as the outcome.

In my 18 years of trading using a support/resistance based technical edge I have found the following to be generally true, others may disagree but if they do I hope it is from an empirically based large sample evidence position not just anecdotal observations or what they think to be true - both of which can be misleading;

1. The more times a potential supp/res zone/area is hit the potentially weaker it becomes
2. Potential supp/res is more likely to get broken in strong momentum / trending conditions.
3. The higher the t/f (time frame) a potential supp/res area/zone exists on the potentially more significant it is
4. The greater the number of t/f's a potential supp/res area/zone is visible on the potentially more significant it is.
5. The more recent (relative to the t/f it is on) a potential supp/res area/zone is, the potentially more significant it is.
6. The confluence of 4., above and/ or different proven potential supp/res factors can result in a higher probability of a bounce from an area/zone, over a break through it.
7. The lowest 'significant' t/f for potential supp/res is 1Hr.
Trader with an Edge.
  • #24
  • May 18, 2021 9:02pm May 18, 2021 9:02pm
Quoting ryuryu
{image} You are here. Where are your SR levels? p.s. I see, paper trading...
The Red lines are my s&r lines.
Perfection is the enemy of good enough!
  • #25
  • May 18, 2021 10:27pm May 18, 2021 10:27pm
Quoting MichaelSch
{quote} The Red lines are my s&r lines.
don't worry mate, your lines are great and clear. I can easily see your levels and you have done a good job.
All the best to you.
  • #26
  • May 19, 2021 12:01am May 19, 2021 12:01am
Quoting peterhenders
{quote} don't worry mate, your lines are great and clear. I can easily see your levels and you have done a good job. All the best to you.
We can all see the levels on the chart as posted. The question is, how far had the chart progressed from left to right before the levels could be drawn and how was it traded.
Good Trading
  • #27
  • May 19, 2021 12:49am May 19, 2021 12:49am
Attached Image (click to enlarge)
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Here re a few samples of support and resistance where there are created. They are created from where price makes a rejection.
I find many areas that are old and have never been retested especially from the higher time frame charts.
There is a saying look left trade right- this is why we look left and gives us a mind to trade right.
  • #28
  • May 19, 2021 2:34am May 19, 2021 2:34am
Quoting Headland
{quote} Your statement is the essence of the central question regarding potential support & resistance, ie whether price is going to break through it cleanly, or break- retest-continue, or bounce from it. Any area/zone we identify on any given time frame is ' potential ' support or resistance because although price may have bounced from there before it is not a given that it will do so if tested again by price. As someone else has alluded to there are clues as to which one of your scenarios 1 or 2 may be the highest probability as someone/others...
Interesting observations guys. Keep them coming.

Using previous x number of swing points (100 is my favourite) and y number of minimum touches (between 3 to 5) within a 10-pip S/R zone, without considering other factors or using other indicators, my findings on whether price has a tendency to break or bounce off a certain S/R zone is much closer to 50:50. This number moves a little (But still stays close to 50:50) when I broke down the statistics by hour. Which doesn't really help much in building a strategy off this.

I have experimented with the use of other factors (including divergent / convergent indicators, price action) in an attempt to increase the probability of my guess at a bounce or a break.

I'm keen to see if anyone has applied a similar approach - Fewer anecdotes, more quantitative analysis.

Keep them coming guys!
  • #29
  • May 19, 2021 2:47am May 19, 2021 2:47am
this maybe a little late buy eyes on , look left on daily for the last spike high
  • #30
  • May 19, 2021 2:49am May 19, 2021 2:49am
Quoting peterhenders
this maybe a little late buy eyes on , look left on daily for the last spike high
eyes on E/U
  • #31
  • May 19, 2021 2:56am May 19, 2021 2:56am
On gu 4hr there is an untested support 1.416xx area, look there for a buy, if there is a close below this line then look for a sell. Good luck
  • #32
  • May 19, 2021 3:44am May 19, 2021 3:44am
Quoting aud
{quote} We can all see the levels on the chart as posted. The question is, how far had the chart progressed from left to right before the levels could be drawn and how was it traded.
EXACTLY!
Observer effect
  • #33
  • May 19, 2021 3:46am May 19, 2021 3:46am
Quoting peterhenders
{image}Here re a few samples of support and resistance where there are created. They are created from where price makes a rejection. I find many areas that are old and have never been retested especially from the higher time frame charts. There is a saying look left trade right- this is why we look left and gives us a mind to trade right.
Bullshit again

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Observer effect
  • #34
  • May 19, 2021 3:48am May 19, 2021 3:48am
Attached Image (click to enlarge)
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Observer effect
  • #35
  • May 19, 2021 3:49am May 19, 2021 3:49am
Quoting ryuryu
{image}
enter when price hits a support or a resistance....SIMPLE
  • #36
  • May 19, 2021 3:52am May 19, 2021 3:52am
Quoting peterhenders
{quote} enter when price hits a support or a resistance....SIMPLE
Try to draw more lines. And the probability to hit the line will increase. And then you can show us a lot more great entries.
Observer effect
  • #37
  • May 19, 2021 4:07am May 19, 2021 4:07am
Quoting Headland
above and/ or different proven potential supp/res factors can result in a higher probability of a bounce from an area/zone, over a break through it. 7. The lowest 'significant' t/f for potential supp/res is 1Hr.
Am I correct? In most cases price bounce from SR level? So let's say if we have visually found 2 then there is high probability to bounce when the price hit it 3rd time? So positive expectation can be achieved only with bounce trading not breakthrough, because it is barrely impossible to predict how many times it must hit and reverse untill it will break the level. Yes? I understand that SR trading is not so simple as I described...
Observer effect
  • #38
  • May 19, 2021 8:50am May 19, 2021 8:50am
It work again and again ...

Attached Image (click to enlarge)
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I post in the last weeks enough examples in my thread. Sorry for those who do not get or want rocket this here.
Select your S&R not only if it looks good, build a story for it.
For those who think every setup must work. Bad news, you better not trade anymore.
Perfection is the enemy of good enough!
  • #39
  • May 19, 2021 11:26am May 19, 2021 11:26am
... and we have a very good test.
Attached Image (click to enlarge)
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Magical.
Perfection is the enemy of good enough!
  • #40
  • Edited 8:12pm May 19, 2021 11:40am | Edited 8:12pm
Quoting ryuryu
{quote} Am I correct? In most cases price bounce from SR level? So let's say if we have visually found 2 then there is high probability to bounce when the price hit it 3rd time? So positive expectation can be achieved only with bounce trading not breakthrough, because it is barrely impossible to predict how many times it must hit and reverse untill it will break the level. Yes? I understand that SR trading is not so simple as I described...
I have no large-sample evidence to say that, (per your question) ' in most cases price bounces from a potential supp or res level.' I suspect not. What I do know, consistent with the general observations I made in my post above (borne of experience and detailed large sample/timescale empirical evidence) is that when price arrives @ a potential supp or res area/zone that I have pre-identified , I am on occasions able to judge whether there is a greater probability of a bounce from it or a break through it, but it is not until price arrives @ such an area/zone that I can determine this and act accordingly and the factors I require to determine this do not always present themselves @ every potential supp/res area/zone. When they do I have a 90% + chance of a successful outcome of any appropriate trade I place based on my historical trading using my edge to date. I will not be discussing my edge here, it is proprietary but I am happy to talk in these general terms.

For eg; Look at my current 1hr gbpusd chart below. You will see it is marked up with the previous near-term obvious fractal swing hi's and lo's, (ie where there was an imbalance of supply over demand that caused price to fall, -or conversely- demand over supply that caused price to rise, respectively.) There are also fibs, trendlines and calculated daily floor pivots on there too, (secondary less important potential supp/res factors.)

Look as an example at the current daily lo (4130) you will see there was a previous 1hr swing lo there and a 61.8% fib of the 4076-4220 move (confluence)...Price arrived there and encountered support. This was an area where the factors I require to determine whether a bounce or break of the potential support is more likely set up - per my edge and I traded accordingly (ie bought there and booked profit.) That aforementioned previous near-term swing lo (dark blue zone on 1hr chart below) is now a swing lo x 2 - ie it has been tested once and held as support.
Attached Image (click to enlarge)
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Trader with an Edge.
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