From support to resistance

SimpleMeLike said:
2rosy,

How can the automated trading system be programmed to trade support and resistance? I can only identify support and resistance with my eyes.

Thanks
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You would not believe all the lines of code in development of "my" definition of head and shoulders, the more precise the definition, the less of signals it gives off, thereby can be tested. Most of signals I have developed based on Support and Resistance fall under Risk Management or a "delay" of entering signals and at times turns off trend signals completely until another definition that negates the original S/R. For my style of trading, does not matter whether minute or monthly timeframe, risk management rules are applied. "Variances" applied to programming are either Godsend or Devil's hand but for me they increase opportunities for both profitable trades and decrease losses. One needs to have in mind of what their personality can handle of losses. I have found many more S/R patterns are worth while to negate signals that actually than generate entry signals, but those that do generate entries are within my limits of win/loss percentages.

Example of how S/R can negate a signal, if where a signal generates entry that might normally produce 3.00pt profits but due to Resistance based on larger timeframe shows this trade might possible provide 3 ticks of profit, unwise to risk 3.00pt to make 3 ticks. Example of "delay" is above but has so many bars to drop down enough that can offer 3pt profit for a buy without changing overall trend.

I agree, Support and Resistance offers lowest risk. Breakouts for me always shown
that risk must be greater and often times will do what I call "YoYo", wait for i.e. 4 ticks beyond some area as one might normally take, but this triggers possible entry and limits placed so many ticks lower and this will lower risk. Of course there be trades where price never retreats, but one misses all the breaks of zero to 3 ticks.

If your eyes can see it, it can be programmed cause your eyes have already made definitions.
 
dozu888 said:
I'd rather call it 'adapting to market conditions'.

I started in 2000 shorting the naz bubble pop till 2002, made good money... then vola died... I could still squeeze out small profit but it was no longer worth the time so I stopped the short term game... from 2003 to 2008 didn't make much... then started accumulating from 2009 accumulating long term..

the 'light' is you need to observe what is going on in the market... the 30000 ft view is the most important one... once you have the correct bias, the execution technique like support/resistance etc is not much relevant.... e.g. in 2001 if you short you can make money with random darts... and so is if you are long since 2009.
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I agree with this....but it longer term trading

shorter term markets follow the line least resistance

it will try to go up 2-3 times if it cant it will try the other side....2-3 times. if not then again the opposite side .
markets are lazy.....they do not work hard to do something....they are always testing to find the easiest route.
this makes it look random
far from it
 
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