Cluster SR - interesting, new way of looking at support & resistance

Absolutely

they will come eventually,
just hang in there

I am not going to use this method myself because I am scalping the 1min chart with picking tops and bottoms. Problem is because of the heavy ranging nature in this TF the EMA's end up fully red right in the middle of the trading range. Therefore there isn't any confluence with this system + S/R + diagonal TL's in this particular TF in allot of occasions. Hopefully below image will make it more clear.. However still wondering how your results will turn out, thanks for sharing this!

Btw, this goes for the other TF's as well. ( Also watching this on the 15M for an overview ) In trending markets, trading pullbacks seem to work ok when it comes to confluence with certain clustered MA's and diagonal TL's + S/R. Ranging simply not effective with this system in my opinion.

15M heavy ranging - only one or two big confluence trading opportunity's
http://img824.imageshack.us/img824/4...avyranging.gif
15M Trending, few more opportunity's
http://img15.imageshack.us/img15/2079/trending.gif

1M - Does not work on lower TF's imo. Too many fakes and EMA's allways end up in the middle because of ranging 1M TF.
http://img705.imageshack.us/img705/834/65951693.gif

Yes Phanti, that´s a wise remark...BUT as Roughtrader mentioned in his examples, adding trend lines, (and maybe other filters you usually use), refines your entry and improves your edge...I personally use Fibos, that alone is also not enough...if youré good, you will hardly breakeven...

Thanks roughtrader this is very interesting, specialy considering most of the trading is done by robots...programmed on algorithms and trend lines and fibos, and yes, different moving averages...I want to jump on the robot`s backs and ride with them, not against them...They are a creation of the BIG BIG BOYS who run the shop...

Is there anyone who have an indi that plots Zones?
These Zones should combining SR plus FIBOS plus PIVOTS together.
Lets say when all 3 agree then there will be a Zone.
Greetings Zackery

I like your thread, it is very useful to view big picture and s/r zone.

Keep going, rough.

I agree with you on the ranging markets,
there isn't many oportunitys as you wrote and this is because of the force being very large going both ways, so both bulls and bears override the zones a little bit, sometime much, these areas are without direction, they show that the markets doesn't know which way to go, there is here a great oportunity you are not seing because you are only searching for the dips all over, an oportunity not to loose money, the greatest oportunity with the ranging markets is that with the cluster ma's we are able to see them coming in advance, again, it's a leading indicator, when the reds are gathering in one place then we stay the hell out of them, this is a trending system not a ranging system, or I wouldn't even call it a system, it's just a a coupple of MA's thrown together, how this should be used is in trending markets, we will use the diagonal momentum to our advantage when there is more momentum in one direction than the other, which will be in trending markets, in ranging markets the momenum forces are equal so there is no advantage there, make sense? we can buy dips in on certain areas in the direction of the trend, on the stripes, where support seems to be great, these are incredibly most often than not demand areas which will result in more high probability trades, in other words when there is thick clusters of SR gathering, and it's getting more red, it's best to stay out or tighten your stops and get in when the clouds thin out. we will use these areas, the stripes, as confluences not as a stand alone thing, ofcourse you could trade them alone if you like gambling but I don't recommend that, there need to be other indicators such as candle patterns, horisontal sup res, could be pivots, round numbers etc. these will be areas with very strong support and the trades isn't very likely to go against us.
this can be used with any trading system so whatever method you are trading you will be able to add this to your current trading to make more high probability trades. or you could trade only the csma along with the confluences, your choice, there is much info we can get from the csma's, not only what I have been into lately, and we need to adress all of the info when trading not just one, I will explain more about what the other things we can have use for later so keep check in

this one plot Sam Seidnes supply and demand zones,
if you want to have some fun you can plot it on the csma's and lets see which indicator finds a supply demand zone first

There is more information we can get from the indicator and this is one more of them,
this show how we can use the information to messure strenght,
if price is able to get through that thick red cluster,
well, guess what, it's very very strong!
you better believe it will continue, don't think, just get in now!

more important information,
this is the current 1 hour chart of NZDUSD
when you are into a trade and see it's getting more red up there,
tighten your stops and take something of.
what it means is likely to be troubble a head,
this is not set in stone but it's better to be safe
and we can clearly see the resistance are growing stronger.

Here is a practical example how you could use the csma
in a downtrend you would like to sell the highs,
if we get confluences like shown in the pic and a nice candle
we have a high probability trade.
what does this picture tell us?
it also tells us that the trend is very likely to continue
because there is allmost no red.

we also have some nice candles
(zoomed in)

simple and visual, keep it up,thanks

Here is another example but in a uptrend,
here we have no horisontal support as confluence,
but we have some nice candles and note that thick area of red,
that is what I would call a demand zone,
the small stripes I consider to be support and resistance,
but the thick ones I consider to be supply and demand,
which means much stonger than normal SR,
there would be tons of limit orders waiting to be executed in that area to the long side,
how exactly does that work?
this are areas where price have been before, a lot!
that is why we get all that red there,
the MA's are reflecting what price did before,
so the chanses are that there is going to be alot of demand there,
we are above price in a uptrend so supply instead of demand is very unlikely,
we will only find supply above the price not below,
unless something very strange is going on,
so in that case, it is easy to know which direction to trade.
and guys ,just have a look on the charts, it works

here we get some more good info on how to exit,
there is nothing to stop the price from continuing where the arrows are, (no red)
at the boxes there is some troubble,
so when we see it's getting more red and more red,
tighten your stops or take profit before price reverse,
wait untill the box area is passed and get in again if the trend is still up
then repeat the procedure

How would u trade the E/U at this point on the 1H , i see res at .3250 and a good demand area at .3175? comments please.

As if 2 EMA's are bad enough, you have 700?

I'd say that's a damn good way of seeing what the expotential moving average history has been for price. There's no predictable power in it though I'm afraid.

Here is another interesting way to see a trend in danger
look at the arrows, there is no red in this area,
nothing to hold price up,
then as we go further down we see the more and more red,
and sure enough, the trend reversed after that.

we are not using the MA's in the traditional way like trading crosses or anything, I agree with you that is a loosers game,
it's not 700, the shortest is 5 then they go up by incrediments of 5
up to 700, example, 5, 10 ,15 ,20 etc, and they are NOT EMAs they as SMA's
you wont get this effect with EMAs so don't try it, I already did

Oh ok.. so like 140 SMAs. Still, what I meant is the historical average of price can't predict the future direction of price. There are patterns happening, but they are seen after the fact which means they aren't trade-able.

here is my view on EURUSD