Do you believe in Support and Resistance? | Forex Factory

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Do you believe in Support and Resistance?

  • #1
  • First Post: Oct 25, 2008 11:10pm Oct 25, 2008 11:10pm
Is it a myth, or is it a legitimate measure of price prediction?
  • #2
  • Oct 25, 2008 11:34pm Oct 25, 2008 11:34pm
I'll give ya a hint. Put potential infront of either support or resistance. There is no such thing as strong, weak, extra damn strong etc etc s/r. There is only potential since we never can know the outcome in advance.
Measure twice, cut once
  • #3
  • Oct 26, 2008 7:48am Oct 26, 2008 7:48am
Quoting tdion
Is it a myth, or is it a legitimate measure of price prediction?
It is a legit. My advice is to follow the big boys (banks, hedge funds ect...). All the big players use s/r. It will give you an idea of where the market might be heading. Always follow the money.
  • #4
  • Oct 26, 2008 8:48am Oct 26, 2008 8:48am
If you can't find it, zoom out to the next higher time frame. Support and Resistance do exist. In fact, most people use them incorrectly, thinking they are pip-perfect. For example, if 1.30 is support, just because it breaks down to 1.2990 does not mean it broke. They are best thought of as "zones". Do they 100% of the time? Of course not, this is why we wait for price action as well.
  • #5
  • Oct 26, 2008 8:58am Oct 26, 2008 8:58am
yes they do exists and they arent myth.. jz look into any time frame... and u'll find SR levels.. usually higher timeframes SR are more significant than lower TF SR.. for me i establish SR levels at higher TF and follow what occurs to prices at lower TF SR and they definitely helps we cant actually predict what would happen when price reaches certain SR levels but by following the PA closely when it approaches the SR levels, we can try to predict the next move.
  • #6
  • Oct 26, 2008 9:06am Oct 26, 2008 9:06am
I do believe in S/R levels. Key levels is all we need. And to trade between the lines shouldnt be hard
  • #7
  • Edited 10:46am Oct 26, 2008 10:05am | Edited 10:46am
i did believe in S/R but not anymore. market always moves towards the maximum "resistance" if i may say so (and that could be either support or resistance), because that's where the big money is.
it's like a big shark swimming towards the food.
Nihil Sine Deo.
  • #8
  • Oct 26, 2008 10:11am Oct 26, 2008 10:11am
One detail : support and resistance are not a definite price but rather a price range.

And yes they do exist and work but its not failsafe. It's just another strong tool to trade.
  • #9
  • Oct 26, 2008 10:33am Oct 26, 2008 10:33am
Well I'm not sure of anything now ! I have never seen such a time in the world of Finance as now. I can say though, my bank account tells me they are legit as ZONES, levels of interest. I always wait for the confirmation candle before pulling the trigger though. I do want to say,for me, my trading has never been more profitable since I stopped using ALL indicators except candlestick charts.Good luck all!
FF = Forex Faggots
  • #10
  • Oct 26, 2008 1:33pm Oct 26, 2008 1:33pm
Quoting tdion
Is it a myth, or is it a legitimate measure of price prediction?
S & R, IBs, breakouts, pin bars...you name it, the chart pattern is just an excuse to enter the market when you have made a decision to jump in because you see an oportunity based on the real data which moves the market, like news, rumors, order flow, head lines, etc.

just my $ 0.02
"I say high, You say low, You say why, and I say I don't know..."
  • #11
  • Oct 26, 2008 4:08pm Oct 26, 2008 4:08pm
I belive this to be a very open ended question because as traders we are all different views of the market.
What i have noticed over some time now is that lines of least support/resistance tend to work better. But how do I use such lines if they haven't been created on my charts yet? Well thats were your art skills come into play. For example, have you noticed how the market moves in certain angles? Or, how price tries to reach the high/lows of the day/week but doesn't? Wouldn't that create a whole new trend line? But then, why do they fail to work.

Whats more important is to follow your own plan, if you decide to use trendlines or not it is up to your discretion. Find out what works for you and adapt to it. Once you find out what works you have found your edge, and only then will you benefit from the market.
  • #12
  • Oct 26, 2008 6:47pm Oct 26, 2008 6:47pm
Yes... they are usefull. Especially the ones that have been tested several times. however don't trade them alone.
  • #13
  • Oct 26, 2008 7:33pm Oct 26, 2008 7:33pm
I'm suprised that Elmer Fudd hasn't weighed in and accused me of trying to bring down the FF machine with another negative thread. According to him, quality members of the community can't handle mean people like myself, and cry their eyes out in their pillows when they go to sleep at night.

Back in the real world, thanks for everyone's opinion.
  • #14
  • Oct 26, 2008 7:38pm Oct 26, 2008 7:38pm
That's very good, Scrat. I tend to believe the same thing.... that the market never "lingers" but is rather extremely efficient....

And things that appear to be support and resistance are really just coincidence.

Well, to each their own.

Quoting Scrat
i did believe in S/R but not anymore. market always moves towards the maximum \"resistance\" if i may say so (and that could be either support or resistance), because that's where the big money is.
it's like a big shark swimming towards the food.
  • #15
  • Oct 26, 2008 7:52pm Oct 26, 2008 7:52pm
Limit orders tend to be clustered where price has consolidated or pivoted before. If there is enough volume in these fade orders to consume the orders that brought it to that place then price will bounce. Stop orders tend be clustered beyond where price has consolidated or pivoted before. If these break-out orders consume the fade orders then price will continue. Both scenarios provide potential to profit. Just because price has broken through a lot of these levels of significance lately, does not mean these levels are less significant, or indeed the information that price behaviour around these levels offers is no less significant.
  • #16
  • Oct 27, 2008 12:26am Oct 27, 2008 12:26am
Quoting tdion
And things that appear to be support and resistance are really just coincidence.
I doubt that pivots at the same price areas are just coincidence.

Quoting birdt
Limit orders tend to be clustered where price has consolidated or pivoted before.
  • #17
  • Oct 27, 2008 6:09am Oct 27, 2008 6:09am
Quoting tdion
I'm suprised that Elmer Fudd hasn't weighed in and accused me of trying to bring down the FF machine with another negative thread. According to him, quality members of the community can't handle mean people like myself, and cry their eyes out in their pillows when they go to sleep at night.

Back in the real world, thanks for everyone's opinion.
That's not a very nice thing to say about the people on here that trade real money, not demo.

And to answer the question.....look at the "random bounce and flip at 1.70 in GBP on the monthly."

So this is the question....If you ask it, will it change anyone's mind? Or, if not as I suspect....it's more like a poll.
  • #18
  • Oct 27, 2008 7:44am Oct 27, 2008 7:44am
I believe on horizontal SR. But not those diagonal.

Besides, dont draw whole chart full wif horizontal SR, only pick those which is visible to all ppl / bigger TF.

If your chart is full wif line, for sure the price will hit either one. (No point doing this).

Still the same, keep charts clean and simple
  • #19
  • Oct 27, 2008 8:21am Oct 27, 2008 8:21am
Quoting tdion
Is it a myth, or is it a legitimate measure of price prediction?
my short answer is - No


my complicated answer is - Yes and No

S/R levels i believe are interesting because so many traders use them and think they are useful. This means to me that S/R levels are not price levels but market psych levels. They are worth pay some attention to since other traders do.

The problem is that S/R levels are almost always being broken and they are different for different TFs which leaves me thinking "support and resistance? so what."
  • #20
  • Oct 27, 2008 11:00am Oct 27, 2008 11:00am
Quoting Tornado
When I first started out 3 years ago a family member of mine who has been FX trading for Barclays Capital in Canary Wharf, London for over 15 years told me to only look at Support & Resistance, Price Action & Fibonacci. My response was ‘How am I going to make money with JUST that, It can’t be that simple,
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