Quote from Nope:
Hi increasenow,
Yes, in a nutshell I look for reversal points using pivot points, candlestick patterns and Volume Spread Analysis.
Well as far as testing is concerned I witnessed my mentor use this exact strategy over a year to make 400%. It was enough to convince me to start paper trading it after about a year. I use real money now and the profitability trend has continued.
As far as support and resistance numbers go I will use Daily s1,s2,s3,r1,r2,r3. Weekly s1,s2,s3,r1,r2,r3. Monthly s1,s2,s3,r1,r2,r3. Daily high/low plus weekly high/low. Previous swing highs/lows. Market profile Value high and Value Low pivots.
I take all of those levels and find places where they cluster. If none really cluster then I just use standard daily pivots (They always cluster somewhere though). I then employ Volume Spread Analysis to give me an Idea of whether there is currently accumulation or distribution indications in the background. Lastly I use candlestick patterns such as morning and evening stars, engulfments, hammers, shooting starts etc. to....
Buy at a support level when there is an indication of strength in the background.
Sell at a resistance level when there is an indication of weakness in the background.
The key is that I won't just sell or buy at the level blindly and hope price reverses there. Only when there is a candlestick formation at the level that coincides with my bias.
If it blows by the level then I just watch it blow by, There is another level waiting.
I trade ER2 and nothing else (on this account).
The magic of this approach really lies in the trailing stop methods and exits. I'll get into detail with that as soon as I have more time to devote.
