Are Your S/R Lines Better Than Random?
- Thread starter Savoy
- Start date
Didn't watch the video, don't really care. Learn on your own how to find S/R then study price action on small timeframes as price approaches S/R to figure out what S/R will break and which ones will hold. Learn how to do those two things and you're set.
Hope this helps
you inspired me to write the below post.
http://www.elitetrader.com/et/index...agame-support-resistance.296497/#post-4219550
it should cover why sometimes lines work and sometimes they don't.
GL
I think some people take this video the wrong way. I've read his book and did most his course. He does use the term support and resistance in one of his setups he calls the " anti". It's basically a trend fade on a failed breakout of resistance or support.
One of the parts of his course that he shows this video mentions to more or less be careful. The brain likes to make patterns that sometimes aren't there. Probably my favourite part of the course was at the beginning on randomness. His take on most price action is random noise and sometimes there are patterns that provide a slight favor in probability that can provide an edge.
I think it's an excellent video to be just aware of what your doing with these lines.
One of the parts of his course that he shows this video mentions to more or less be careful. The brain likes to make patterns that sometimes aren't there. Probably my favourite part of the course was at the beginning on randomness. His take on most price action is random noise and sometimes there are patterns that provide a slight favor in probability that can provide an edge.
I think it's an excellent video to be just aware of what your doing with these lines.
Channel line s/r is often overlooked, but there is quite a bit there...
There's no such thing as "noise". Every tick records a market reality.
He got that part right, but you need volume, to distinguish between important and unimportant information, for the most part. It's all "information", though, technically.
S/R lines (unlike pivots and fibs) are among the things that are better than random lines, if you draw them intelligently and realistically.
I didn't ask my guy: he knows nothing about lines.
Luckily, Grimes' point is not to discredit S/R lines entirely: it's to make traders aware of how our vision works and, if we're not careful, that we can recognize patterns where there aren't, like faces in the clouds. In other words, be sure that the line you've drawn had meaningful interactions upon close inspection, and wasn't just thrown at some areas of messy congestion.
He makes a good point, but I wanna know why he had to draw so many S/R lines. Had he drawn only one, it probably wouldn't have looked so random.
Try it out.
My own experiments showed me that we're good at seeing things whenever we can, and a single line already does that because price never moves in a straight line and thus can seem to "interact" at most levels if we're not selective enough about what constitutes meaningful "interaction".