Confirmation vs. S/R
- Thread starter RocknRide
- Start date
What if after support becomes resistance you dont' get the pullback ?
What if after support becomes resistance you get the pullback and what you thought to be the transition of support to resistances end up being noise or the head of an inverse head and shoulders ?
There is no edge in what you said, too much volatility, consistent precision does not exist at these so called support or resitance levels because support or resistance is created in the now, whatever used to be support or resistance holds no guarantee in the present or future they are just battle zones for the bulls and bears and in those battles a lot of noise is created.
exactly! In case anyone hasn't realized it yet
the market will ALWAYS give u the signal otherwise you're just gambling. Depending upon how it enters you're going to get different R:R's per strategy of course this part's up for debate as well. Take them all or cherry pick.
So easy to ask another what they would do⦠and in some cases it is the right course of action
But not in this case
For unless we are trading the same exact thingâ¦. And unless our S&R lines are identical⦠And unless we are trading the same exact way
What I would/ will do â wonât help you in the least..
As every trading vehicle has a unique personality - and our individual interpretation of that personality is also unique
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What does your journal say â you know the one you update every day after the closeâ¦, that among other things, is used to capture the dayâs action (personality) of whatever youâre tradingâ¦.
My says;
S&R lines on some of the stocks I trade â captures PA pretty well â so usually I buy/ short when price hits themâ¦
On other stocks I trade PA has a propensity to overshoot the lines I use â so usually I will wait for further information
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Btw please appreciate every bit of PA information you get - costs;
Hence the more information you require before taking action â the more itâll cost you
Of course the converse is true also;
Taking action before receiving adequate information â will also cost you
Seems either I canât make up my mind (which has been known to happen)⦠or we damn well better know the personality of what weâre trading â which is going to differ for all of us - ya thinkâ¦
Food for thought Sir
RN
If my market outlook is bullish and support is hit, I take the trade at that zone if it's part of my intended entry trigger. A usual dollar-size stop is preferably on the other side of support, but not always.
If in that bullish scenario support breaks and I'm stopped out, does not automatically mean the direction has changed and time to flip short. That assessment takes more than just a poke thru of S/R zone.
If price breaks support to the downside, comes back up and closes above again, it sets up another potential buy situation. Many times the most powerful price moves follow a stopped-out trade in similar "trap" or spring" situations... the second entry of essentially same trade may be biggest profit move for that day.
If price breaks support and then all criteria meet a bearish scenario, I'll look for shorts near prior support now presumed resistance.
*
There is no such thing as "confirmed" by strict definition in trading. Proper term should be "suggests" instead. I'm guilty of using the term confirmed when in reality nothing's confirmed until hindsight history. I do need to use the term "suggests" in the future.
S/R zones are nothing more than clusters of buy - sell stops that the market needs to work thru. Supply changing hands. There are many zones of S/R all over a chart... the more sideways a tape has been, the more muddled it becomes.
My personal favorite S/R zones to play are the little continuation flags in directional moves, particularly the first one formed. Usually a measured move of equal distance from congestion break = first flag = next congestion point.
Nexen, it doesn't take your talk-load of crap for me to answer a man's direct question. But do go ahead and rail away here as you see fit... ET is a place for entertainment, not education due to ventful struggling traders just like you. The childish trolling and rants keep many successful traders here lurking and silent.
Now please carry on
Thanks to everyone who provided their insights!!
There is much to consider here...
The main reason I asked this question is I have in the past waited for a signal or confirmation, but have found that I will usually get stopped as my S/R level is taken out by a wick. In many cases, if I had placed a limit right at S/R, my stop would have been large enough to withstand the "stop hunting" at S/R.
I will continue to study each scenario to understand which is more probable to a successful trade.
There is much to consider here...
The main reason I asked this question is I have in the past waited for a signal or confirmation, but have found that I will usually get stopped as my S/R level is taken out by a wick. In many cases, if I had placed a limit right at S/R, my stop would have been large enough to withstand the "stop hunting" at S/R.
I will continue to study each scenario to understand which is more probable to a successful trade.
RN,
You are absolutely correct. I did not provide the full picutre.
I mainly trade highly liquid instruments; lately the NQ emini futures...
Good point in referring to journal, which I do use and update daily...
Only point I disagree with you is asking others what they would do as asking may provide ideas that I have not come up with on my own.
I appreciate the great response to my question!
RnR
Quote from athlonmank8:
Depends. Buying right at SR is referred to as "predicting the market". Waiting for confirmation is the best strategy but it can really cut into your P/L so you must switch into different timeframes and tick charts. The trick is tak narrow bar signals that are very reliable. Anything too wide either buy the pullback (have a strategy for this) or patiently wait for the the next signal as there are plenty
Ath,
Special thanks to you for really getting the conversation going here!
This is mostly the way I have been trading, watching key S/R levels and entering when I get a signal and confirmation the level is holding... only problem I have been having is getting shaken out only to re-enter again (most times at the same price) for a successful trade.
I do like the idea of starting small with an "at S/R" entry, then scaling in with more confirmation.