Do you believe in Support and Resistance?

That explains BarCap's poor performance.

yeah, but on what time frame? S/R is a little different depending on what TF you trade.

S/R can be a muddled mess

Perhaps its just luck.
(This is a joke)

Support and Resistance.

Price can stop at it, it can burst streight through, it can pass through and reverse by any number of pips.

Trading is all about being faster or smarter or better informed than the next trader. Because of this it should be blatently obvious that price can do anything at any point, the only rule is that there are no rules.

Everyone is trying to be one steap ahead of the other, so do you think S&R can give any real edge?
If S&R is used for an 'edge' and profits are left to run, then this is the point where you make profits, when letting profits run. But who knows how far price will run to take you over BE? The answer is nobody does, so does this meen your profits are luck?

Good luck to all aspiring traders.

Leon

Well, eurusd is tickling a high from late January 2006.

why not? as long as i can bank i money to my account. we don't trade the market, we trade our belief system. think about it.

cheers..and have a great trading day.

However you want to wrap it up, we ARE trading the market. If you want to call it a 'Beleif system' then thats fine, its still the market.

Cheers, great trading day to you aswell.

Do I believe in Support and Resistance?

Is it a myth? No. Any long-term chart will show you that these areas CAN be and OFTEN are respected, irrespective of the time between them
No. Any long-term chart will show you that these areas CAN be and OFTEN are ignored.

The thing is to see what PA is telling you when price arrives at a SR area and then trade what you see. When the market is in turmoil as it is at present all the Support levels can and will be taken out, but each then becomes a legitimate Resistance area on retracements to continue playing the down/uptrend.

If S/R is a myth then so are all the other tools we use.

Not much else to say on S/R.

Thanks PeterFM!

Is this another Marber disciple?

Seen any others around lately ? Wouldn't call myself a disciple but I've learned a lot from him, yes.

I did see his name mentioned around FF somewhere and that's why I got the book. I'm forward-testing one particular part of his thinking at the moment and so far so good.

But you do need patience and that's in short supply for most noobs

Yes, there have been a thread where we discussed some of he's writings. May I ask what part you're testing ? Think I've tried most of he's stuff and would be interesting to chat about it

Not a believer as such, but do believe that if enough people believe in a support line they can make it happen.

Zones at best, imagine a truck going 80mph and putting on the brakes. Where will it stop? Now imagine a large fleet of trucks in one lane trying to stop at once, its rarely exact.... unless it is..... wtf hey wait it just closed exactly at the 61.8, ok nevermind, forget everything I just said

In my opinion in order to understand S+R you need to think about whats behind it. Why would the market change direction at this point? One answer is a balance in traders opinions at that market price. There are always people willing to go against the current market movement, the difference is, the market actually does changes direction because there are enough traders with the same opinion to do this. Although I am a "believer" the principle does seem to be a self fulfilling prophecy, but hey, it works for me!

why not??!!! I thaught it works!always..but I'm newbie and may by I'm mistaken?

Hi,

I'm a bit late on this thread but I'd like to throw my 2 cents anyway :-)

The question of using S/R levels has bothered my a long time.
I came to the conclusion that there is absolutley no reason of not using SR.
Let me explain why for two main reasons:

1) Math and academic reasoning

In a sense, the efficient market hypothesis EFM states that the price of an asset follows a random walk.
If this is true(which by the way can never be proven since EFM is a hypothesis by definition), then no one can make a fortune of trading.
As an indication that EFM is actually true, one may generate a random walk with Matlab, R or any other software.
The resulting plot looks like a real price chart and even the best "experts" cannot distinguish between an artificial and real chart with any high significance level far from 50%.
Because of that, any of these artificial generated plots have lots of S/R levels as any other real chart.
So, does this indicate that the levels on real charts mean absolutely nothing compared to the completely random levels generated by computers?
You might say so, but think of it this way: long before human kind invented EFM and random walks, there have been markets all around.
And as humans we want to research and understand these markets as we research everything else in this world.
In the ongoing approach to understand the markets better, the major part of the academic world invented stochastic calculus and other fancy math tools.
So this is a try to explain price behaviour with random variables.
To me, the reasoning that S/R levels on real charts are nothing but random elements of a random walk is not a fair take.
A random walk in my eyes is simply the best take we currently have to model price movements.
But this is just a model(nothing more or less) and it describes exactly what it was intendet for, so what?
All in all, a random walk is in no way an indication if S/R levels are meaningful or not.
So, if price movements are completely random, then incorporating those levels in a trading strategy cannot do a harm nor achieve any gains, right?
If you can prove that S/R levels do harm your equity growth, then this would mean that there is something non-random in price movements.
So either way, there is no mathematical sound reason to abandon S/R levels from your trading.

2) Psychological reasoning

I don't want describe what might be going on on S/R levels regarding human behaviour.
Instead, think of the psychology that S/R levels can have on your trading system.
The reasoning in 1) should point you in a direction that it is better to incorporate S/R levels if you like to use them, regardles of people or PhD's saying that they are of no use.
It would be a total different story if there would be evidence that S/R levels do harm all trading systems.
To me, it all boils down to that a trader should use all tools he thinks are worth it, since this gives him enough trust in his system to trade it longer.

In the attachement is a paper from Osler on this topic.

Happy trading,
Juergen

PS: Excuse my bad English.

S/R Levels are just the Heavy Emotions of Human Beings.. Which Binds them to follow every time they reach such level.. Market is not controlled by Machines, they are controlled by us Human Beings... So Market reflects You, My and all Trader's Emotions..

Just adapt at your own view to look the Market...

Of course there is support and resistance. There are also trend lines and sentiment. It isn't always easy to gauge but it's always there.