Indicators are Liars! Support and Resistance Trading for FX

Hi guys

Apologies for the slow down in the thread. Been a little busy, I am thinking of creating sheets for EU,GU and UJ.

Just trying to work out the best sessions to send them out.

EU and GU I guess would be any time before London session

UJ before NY.

Anybody got any thoughts?

Both. Just depends on PA and momentum

Any time before London session sounds good, whatevers convenient for you. looking forward to your posts.

To start off a little chat, this is the 1hr set up that I use. Marked the two tops of hourly candles shown, the last 2 places where gu had turned.

I got first sell today off peak from 1 min chart rejection, 6417.

Also on gu I don't know how long you have traded it but adding psych levels 75 and 25 may help also as it did this morning.

Glad to see you back! With a thread title like this I hope it continues.

GU at the lower end of range for last month where its found support, W S1 could provide a good bounce. If it fails my next target would be M S1.

VSA is not about just volume over time its VSA stands for Volume Spread Analysis. so spread and close of the bars are important not just volume.
and its BASED ON SUPPLY AND DEMAND. and mainly usefull on s/r levels.

Yes, I neglected to mention the analysis of spread (I analyse spread with T101's basket method but between bars, rather between the buys and sells of the IA). However, VSA is NOT based on supply and demand in the truest sense, only on immediate impulses. Now, VSA may hold proper to TRUE supply and demand levels as will be the nature of the market when it reacts to SR.

Note that I am not knocking VSA. The analysis of volume and spread for impulsive buys and sells is a great way to trade, but these impulsive buys and sells are not necessarily supply and demand.

However, you detract from my original post about PF posting on the VSA thread. My comments were directed to show that PF's opinions about SR may not necessarily relate to anything VSA.

Hmm immediate impulses dont agree with you coz true VSA is about reading background.. to understand if supply overcome demand and vise versa. and it really help also near s/r areas. i just noticed you commens about vsa so i wanted to make it more clear

If everyone agreed, no one would make any money!

Indicators have there place and for some they work and for others they dont. The problem with Indicators is that some people believe that they are the signal and that having a colourful array of lines and dashes will give them clear indications of when to buy/sell and when to stay out.

Far to often new traders get caught up in the web of lines, they see a system that uses them and they try to understand it well before they have understood basic Price Action and Support and Resistance zones.

That said plain charts are all you need. If you can spot good setups at a known area of S/R and you can plan to execute your trade then IMO you will do just as well, if not better than a Picasso chart. I am bias towards clean charts only because I have had much more success with a simple chart and a simple method compared to a time when I thought lines here, there and everywhere was the solution.

If you are new, learn the basics. Once you have a good amount of experience then make a desicion on the indicator part.

Razor

Hey guys

Thread got put on hold a little because of other commitments getting in the way.

But now we are back on track, attached is my data sheet for the morning. Hope you like it, any feedback do let me know.

This could be a useful thread for many. Before it gets too large I just wanted to add my 2 pips.

* Support & Resistance are better thought of as Zones or Areas rather than single lines.

* Support & Resistance in and of themselves are not trade signals.

Support & Resistance represent areas where there has been a change in supply/demand. An area of resistance is where sellers (supply) swamp buyers (demand) which may lead to a change in price direction from up to down. It may, just may, lead to a change in price direction, it is felonious therefore to use them as trade signals. Simply, just because price is moving up towards a resistance area, that is not a reason to get short.

Once price reaches the area in question, what price actually does needs to be taken into account. Price may do something or it may do nothing. The key is why might price do something. Because the area has already been established as an area where a change took place. And the Big Boys remember such areas. What is needed to effectively trade these areas is an entry signal method.

With an entry signal method, a trader can then test the effectiveness of the support/resistance areas used. In other words, one can test trade results taken in areas of support/resistance versus same signal trades taken in "air".

Take a look at the first chart.

This is of the Euro 5 min. There are a few key changes in the supply/demand dynamic represented on the chart. However, at least for me, no entry signals are present. Understanding when and where things change in the market is important in and of itself. These changes are by definition areas of support & resistance as they represent changes in the supply/demand dynamic.

Now look at the second chart.

This is a 5 min Swiss Franc chart. I have removed the volume (as a VSAer this kills me ) and the entry method shown is a Japanese candlestick pattern.

What it all comes down to is: Seeing what you want to see (entry signal method), where you want to see it (areas of change in supply/demand).

Don't just go short because price is moving up towards a Naked POC.

This is not a post about which method of defining support & resistance is better. Rather this is a clarification of WHAT support & resistance actually is and is not. Once you understand what it is not, then one can seek to develop an entry signal method to exploit what it is........

So much for not charging. Now $49 a month. Another scammer.