There are many ways to view support resistance as well as any other technical things we all may look at to form trading opinions and enter trades. Fibonacci levels, stochastic readings, pivot points, ect, in addition to s/r are simply guides you must use to look for opportunities. I cant say what is right or what is the wrong way to look at s/r but I can briefly share the way I use them.
I describe my style of trading as selling breakdowns of support and buying breakdowns into support or buying breakouts of resistance while selling breakouts into resistance.
I look for specific chart patterns ( consolidation and exhaustion )that generally get resolved for trend moves ( 8-24 points on the NQ's ). I use support and resistance as guides to find out what type of trade it will be, profit potential, and of course likely price level for occurrence.
Now, once I have established important levels of S/R I then look to the 30,60,120 min charts for patterns that may tell me what to expect to occur at these levels.
Also there are different types of support and resistance and all too often I see traders lumping S/R into one general category. Here are some different forms of S and R:
1. Price
2. Moving Average
3. Gap
4. Exhaustion
5. Trendline
Each one of these types of S/R can act quite differently and must be approached in subtly different ways. The key is to be consistent in the way you use S/R and develop methods that you can easily see.
In summary, to answer the posed question, I use chart patterns at S/R to go short or long depending on the situation. There are times that I may look at an area as resistance and look to go short there then as soon as 30-60 minutes later it may become an area to go long. The way price and patterns develop at certain S/R levels is the thing I feel is most important to view in looking at support/resistance.
If one says " I buy support and sell resistance " that can be as much nonsense as buy low and sell high. There is good money to be made in buy high and sell higher, and sell low and and cover even lower. I would say I do both, in addition to buying support and selling resistance, whatever the market tells me carries the least risk while providing adequate reward for the risk assumed, as well as what is most likely to actually occur.
Main thing being don't get caught up using only one way to view support and resistance and use it like anything else, as a guide to trading decisions and not a be all and end all trading trigger.
AllenZ
I describe my style of trading as selling breakdowns of support and buying breakdowns into support or buying breakouts of resistance while selling breakouts into resistance.
I look for specific chart patterns ( consolidation and exhaustion )that generally get resolved for trend moves ( 8-24 points on the NQ's ). I use support and resistance as guides to find out what type of trade it will be, profit potential, and of course likely price level for occurrence.
Now, once I have established important levels of S/R I then look to the 30,60,120 min charts for patterns that may tell me what to expect to occur at these levels.
Also there are different types of support and resistance and all too often I see traders lumping S/R into one general category. Here are some different forms of S and R:
1. Price
2. Moving Average
3. Gap
4. Exhaustion
5. Trendline
Each one of these types of S/R can act quite differently and must be approached in subtly different ways. The key is to be consistent in the way you use S/R and develop methods that you can easily see.
In summary, to answer the posed question, I use chart patterns at S/R to go short or long depending on the situation. There are times that I may look at an area as resistance and look to go short there then as soon as 30-60 minutes later it may become an area to go long. The way price and patterns develop at certain S/R levels is the thing I feel is most important to view in looking at support/resistance.
If one says " I buy support and sell resistance " that can be as much nonsense as buy low and sell high. There is good money to be made in buy high and sell higher, and sell low and and cover even lower. I would say I do both, in addition to buying support and selling resistance, whatever the market tells me carries the least risk while providing adequate reward for the risk assumed, as well as what is most likely to actually occur.
Main thing being don't get caught up using only one way to view support and resistance and use it like anything else, as a guide to trading decisions and not a be all and end all trading trigger.
AllenZ
