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Price reaction to support and resistance

  • #21
  • Sep 12, 2010 9:30am Sep 12, 2010 9:30am
Quoting Porkpie
This is where the method I use differs. I concentrate on the consolidation or pivot areas (not pivot points) as this is where price broke out, the flash point of the move down that created the supply/demand zone in the first place. What troubles me about hidden gap's zones are that they are too far from the original source for an entry point when price returns. However, on the flip side when price doesn't quite make my previous consolidation areas on return (although I have a 10 pip entry from the zone) hidden gaps zones make a lot more sense. HG,...
Hey Porkie, I totally agree with how you pick your levels, it is the same way that I find Supply/Demand areas. I used to trade VSA and realized that it was still causing me to second guess things, i have got rid of all bullshit indicators and now only trade levels where I believe supply/demand are most out of balance.

I found with VSA and all other indicators that it usually gets a guy into a trade late when prices have already started moving away from a level.

I only take trades that have at least a payout of 3:1 reward to risk ratio to the next supply or demand level as well as some other rules I follow.

I have learned everything about the way I trade now from a fellow named Sam Seiden. I think the guy is one smart dude. I don't personally know him but have studied everything that can be found on the internet that he has produced.

I would recommend his studies to anyone who wants to become a better trader. JMHO.

I am not dissing VSA, traded that way for the last 2 years and have come to the conclusion that the way Sam Seiden teaches is now the only way for me to trade, it just makes the most sense to me.

Peace, Scott.
  • #22
  • Sep 12, 2010 9:41am Sep 12, 2010 9:41am
Quoting Davidee
The two 'tips' that I find the most valuable on support and resistance are -

1. Like trends and everything else, the larger the time frame the support and resistance appears on, the more significant the support/resistance is.

2. The flatter the support and resistance line, the stronger the support and resistance. The strongest support and resistance tends to occur around double tops and bottoms, whilst steep trend lines tend to break a lot easier.
Very true indeed!!! Support and resistance is so much more than just connecting two points and drawing a straight line. It is a sweet science.... an art form. There are support/resistance scenarios occuring all the time that most traders are clueless about.
  • #23
  • Sep 12, 2010 9:44am Sep 12, 2010 9:44am
Quoting FibbinArchie
As Sam Seiden puts it; the demand/supply imbalance at these levels is so large that either the buy or sell orders (depending on if P is at resistance or support) get filled so quickly and exhausted, that price has to move from that level very fast and therefore very few get to trade at those extreme levels, especially if they are waiting for any kind of confirmation.

This order flow is quite clearly visible in the charts and is characterised by spike top/bottom reversal bars or pin bars or insert your favourite "nom de guerre," but you get the...
Exactly, nice point. You definitely need some balls when taking a long position when all you see is big red candles coming into a level. Most people can't get themselves to pull the trigger when they see this. But the astute trader knows what is taking place and what the majority of people are thinking and it is not to go long. I will buy from that seller who is selling at a level where demand previously exceeded supply.

Sam is the man!
  • #24
  • Sep 13, 2010 9:52am Sep 13, 2010 9:52am
I hardly post but I would like to say I am glad the op started this topic as this is in line with how I trade. I will be lurking around this thread to see what unfolds and maybe even contribute some thoughts myself <thumbs up>
  • #25
  • Sep 14, 2010 3:11am Sep 14, 2010 3:11am
Just a point I'd like to throw open, how far back do you guys look when identifying zones, let's say you're trading an intraday TF?
  • #26
  • Last Post: Sep 14, 2010 3:19am Sep 14, 2010 3:19am
Quoting FibbinArchie
Just a point I'd like to throw open, how far back do you guys look when identifying zones, let's say you're trading an intraday TF?
generaly the further back you look the better it will be, some times when price makes new multi month/year lows/highs you have no alternative but to look a long way back, it is still relevant.
Biggest joker
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