Confirmation vs. S/R

[athlonmank8]

Quote from austinp:

Here's the answer, just not sure if your general ophidiophobia will allow you to objectively digest the nuggets of truth to follow

The problem with trading "pure price" and "support - resistance" is this: all S/R levels are not created equal. S/R levels on their own don't really mean that much... it's what else is happening around them that validates or negates said zones for entry point effectiveness.

If trading were mechanically simple as buying or selling S/R breaks and pullbacks, everyone here would be rich. Heck, everyone who ever tried trading would be rich. Right?

Right.

So the answer to this question isn't down the rabbit trail this thread is heading. Dead end. The answers are not how to determine where to enter around any point of S/R on a chart.

The real answer lies in knowing which way price is likely to go in the first place, then using key S/R levels as confirmation entry points. Once you begin to use S/R zones as places to enter instead of places for "show-me-which-way" decisions, you're on the right path.

Once you use S/R zones as strategic entry points as part of an overall trading approach, entries sought on breakout = pullback of certain S/R zones and likewise reversal fades of other type S/R zones is the focus

All S/R zones are not created equal, and they aren't the focus of fixation for any workable method. They are key spots on a chart where to take actions, not where to make decisions.

But what do I know? The ophidiophobes will dismiss anything I have to share anyway. So take it or leave it as is.

exactly, but without a picture or three, what you said isn't going to mean anything to anyone unfortunately . You're spot on.

 

[austinp]

Quote from athlonmank8:

exactly, but without a picture or three, what you said isn't going to mean anything to anyone unfortunately . You're spot on.

this conversation cannot be summarized or satisfied with a picture or three... or twenty, or one hundred

The framework is this: random S/R alone does not offer any edge. It needs to be part of something bigger than that.

Random example would be market profile levels. Say price drops to some important mp zone, and holds for a moment. When price sits there, taking the reversal long from price dropping is hopefully a pullback. But it's just a statistical guess until price actually bounces.

Now if price breaks thru and closes on the bottom side of prior mp support, it is now presumed resistance. Trading near or at the bottom side of broken S/R is likewise a statistical guess.

So the true answer is not in how to tell if something is confirmed or guesswork at S/R levels on its face: the confirmation comes from repeated similar actions in similar situations = sequences where the S/R level is merely one part of that equation

 

[Scataphagos]

Quote from Nexen:

I wonder if any of the so called pro traders in ET will release any "nuggets" on this topic.

Little tricks like this is where real edges are born.

Good question just not sure if many are willing to share in this department.

KISS. I don't believe in the concept of "confirmation"...

 

[BSAM]

Quote from wrbtrader:

Support/Resistance levels or zones are not trade signals by themselves. Thus, best to wait for a trade signal and such works well for me.

Thus, it's possible to get a sell signal @ support or buy signal @ support...same for resistance.

However, if you're identification of support/identification price areas are inadequate...the performance of your trade signals will be poor too. Therefore, test your trade signals alone versus your trade signals @ support/resistance.

P.S. there are dozens of different types of s/r levels or zones. enough to keep you busy for many years.

Mark

Good advice. In fact, best advice so far on this thread. The rest is pretty much typical ET mumbo jumbo.

 

[austinp]

Quote from BSAM:

Good advice. In fact, best advice so far on this thread. The rest is pretty much typical ET mumbo jumbo.

S/R zones are places to target trade entries at based on other reasons than the fact that S/R assumed conditions exist at those zones.

Said plainly, use them for potential trade entries... not reasons to enter a trade

How's that for concise?

 

[athlonmank8]

Quote from austinp:

this conversation cannot be summarized or satisfied with a picture or three... or twenty, or one hundred

The framework is this: random S/R alone does not offer any edge. It needs to be part of something bigger than that.

Random example would be market profile levels. Say price drops to some important mp zone, and holds for a moment. When price sits there, taking the reversal long from price dropping is hopefully a pullback. But it's just a statistical guess until price actually bounces.

Now if price breaks thru and closes on the bottom side of prior mp support, it is now presumed resistance. Trading near or at the bottom side of broken S/R is likewise a statistical guess.

So the true answer is not in how to tell if something is confirmed or guesswork at S/R levels on its face: the confirmation comes from repeated similar actions in similar situations = sequences where the S/R level is merely one part of that equation

we were doing good up until here. Where's your stop? What's the basis for your entry. If you can't summarize it with 100 pictures it doesn't sound like there's going to be a repeatable edge? Like the house, it must be done over and over

 

[austinp]

Quote from athlonmank8:

we were doing good up until here. Where's your stop? What's the basis for your entry. If you can't summarize it with 100 pictures it doesn't sound like there's going to be a repeatable edge? Like the house, it must be done over and over

the example I gave tried to explain why the concept of what to do with or at S/R on its face is a dead-end path

S/R is something to use for trade entry decisions... not what to do if S/R levels are hit

If your overall method suggests long, then buying dips to key S or buying breaks of key R levels are on the screen. If your overall method suggest short, then selling resistance to key R or selling breaks of key S levels are on the screen.

Trying to figure out which way to trade based on an S/R zone and no other information is not going to work

 

[BSAM]

Quote from athlonmank8:

we were doing good up until here. Where's your stop? What's the basis for your entry. If you can't summarize it with 100 pictures it doesn't sound like there's going to be a repeatable edge? Like the house, it must be done over and over

LOL...Guru "speech" is usually difficult to interpret.

Markets do the same thing over and over and over.

 

[BSAM]

Quote from austinp:

the example I gave tried to explain why the concept of what to do with or at S/R on its face is a dead-end path

S/R is something to use for trade entry decisions... not what to do if S/R levels are hit

If your overall method suggests long, then buying dips to key S or buying breaks of key R levels are on the screen. If your overall method suggest short, then selling resistance to key R or selling breaks of key S levels are on the screen.

Trying to figure out which way to trade based on an S/R zone and no other information is not going to work

So do tell, Austin...if you are watching, say SPY, and support is met, what, exactly would you do? Try to be really clear.

 

[ivanbaj]

What if you wait till support is broken and becomes new resistance. Then enter on the pull back to that new resistance?