¿How to properly spot S/R?

NQurious said:
There are two issues that you need to address; First, defining the s/r levels that are significant, and second, defining the conditions that would prompt action, i.e. what does price have to do to make you place a trade.

As for S/R, I use the previous day's high, the previous day's low, the opening price (RTH),
chart swing high, chart swing low, and the previous day's close (RTH).

If those levels make sense to you, the second issue is what does price have to do if it reaches yesterday's high from below, to make you sell it is long, short it, or buy it to establish a long?

Price can only do one of three things: It can continue (breakout), reverse, or go sideways. This is where the work of developing a trading plan really begins. What kind of trader are you? You mention that you have a plan that allows your to maximize profits during trends and minimize losses during consolidations. What is wrong with that plan? Now use those levels as areas where if your current method gives a sell, then sell, or if a buy, then buy.

If you are a day trader the only s/r levels you need are those I listed. You will do yourself a favor if in addition to those you pay attention to the midpoints of ranges and swings.
More...

Ok, so given what you suggested I have identified RTH PDL as my closest R level. This coincides by a couple of ticks with the whole movement 50%. I will pay special attention to this level when reached. And post my update at the end of the day.
upload_2019-6-3_7-47-48.png
 
PAAddict said:
Thanks for your input. I am trying to understand the Horizontal S/R logic before starting to consider moving S/R levels. But thanks for taking the time to participate.
More...
%%
OK PAA actionAdd; QQQ is still DOWN=bear trend= almost all moving averages.
And 2 day chart, horizontal S&R logic trendlines/price= all most down[9;34+ 9;37 Central time]================================================

SQQQ is up=same way; it moves up= when QQQ moves down.:cool::cool:,:cool::cool::cool::cool::cool::cool::cool:
 
Ok, I gave a try to the level spotted in premarket. I found that today trying to anticipate a trend out of a BO did not work (first Long), then the short from the LH after the fail of the BO didnt work either. By then my reading was congestion. A new long after the first RET after the new BO attempt was scratched and then a new Reentry long was the only good trade for the day. As I am just testing this. I stopped there and started watching.

Things I dont quite get regarding S/R:

1. Where does R came from at 2759?
2. After prices move away from 2750 it seems like if that level had some sort of gravity field that attracts prices again towards it.

These are my observations for today.

upload_2019-6-3_10-38-46.png
 
After the market Reversed from 2764 and crossed the 2750 level something interesting happened. Once a LH below 2750 was cleared, prices fell all the way to 2736 which was the same distance from 2750 to 2764, but on the way down.

upload_2019-6-3_11-36-16.png
 
Ok, so my levels for today are in S, PDH and in R 2 days ago H and 3 days ago L. I will watch what happens at all those levels in case they are hit. All levels are RTH as suggested by NQ.

upload_2019-6-4_7-52-42.png
 
Another interesting day trying to understand how this S/R thing works. Today we had a slow downtrend (Trend Channel) that turned into a Triangle before a final BO and a proper uptrend. During the channel as expected trying to get through S/R levels was hard and costly.

I am still trying to explore what I found yesterday, regarding the distance the market will move once S/R Level has a BO and a RET. I think it has something to do with the distance traveled between the beginning of the trend and the respective S/R Level, so if a trend starts 20 points away from R and R is broken and tested the expected distance for the trend to travel before finding opposite force should be 20 pts. If anyone has any Idea around this issue, it would be great to have some feedback.

upload_2019-6-4_11-41-54.png
 
My chart today 15 minute ES with the pivot levels noted.

ES.JPG


If nothing else, the strong support at the prior chart swing low and the prior day's high as evidenced by traders stepping up to buy that level and not even allow for a retest gave a good indication that the gap was not to be readily filled. When price broke the opening high, that indicated that either a bull trend day or a trading range day was on tap and all but eliminated the odds of a bear trend day developing.

The break of the secondary opening range high threw the odds solidly behinds a bull trend day where the market was expected ... yes, expected to close at its eventual high, whatever that high would be. The opening range for me is whatever range sets up at the open and can consume as much or as little time as necessary for traders to mark their respective lines in the sand. The secondary opening range is the range of the first 60 to 90 minutes ... context will typically tell you when it has ended. In this case the rally to 80.25 following the 64 low was then retraced halfway back to the tick (72.25) HWB is more or less a line in the sand. When the market broke to a new high, one could have established a long and held it to the close. with a stop below the 72.25, imo.
 
Last edited:
murray t turtle said:
one days low is not really support @ all- nor does 5 minute chart really have any support in a bear trend. S+R is not exact anyway
More...

The low or high of any day is the same price whether a single tic chart, 5 minute bar, hourly bar, or daily bar. During a bear trend, there is typically much less support than resistance, and as a high is a high is a high, you can quite readily identify resistance on a 5 minute chart (or a tic chart, range chart, hourly chart or daily bar chart).

S/R is as exact as it has to be, which is to say that when trading support and resistance, "almost" is often close enough.

You seem to use moving averages in your definition of S/R. While some moving averages do appear to act as "dynamic" s/r during trends and counter trend movements, most would agree that during trading ranges MA's are good for nothing other than telling you that price is in a trading range because the MA's are all knotted up. This is not to disparage MA's and I keep some around myself for the value they have during trending moves - tey can also be quite handy in defining various conditions to enter trades. But if price is trading below the moving average and above the prior day's high, I am not going to disregard a buy signal at the test of that high as support just because price is below the MA.

S/R will define the extremes of that range, however. Price action at those levels will convey information. This information will allow a price action trader to make a profit, limit losses to a fraction of the potential profit, and reverse position when necessary. There is no information available to the day trader as valuable as yesterday's high, low, and close, and today's open. Each level will not have the same value on any given day. For example, yesterday, 6/4/2019, it was the 6/3 high that became the pivotal point of the day. The 6/4 open thus became a bull above/bear below level once buyers showed immense interest above the 6/3 high.

You may not be day trading. Day trading is quite a different activity from swing trading, and world's apart from investing. But even the swing trader could likely increase his or her ability to better judge the market's action by noting price action around prior highs/lows, closes, and opens.
 
NQurious said:
The low or high of any day is the same price whether a single tic chart, 5 minute bar, hourly bar, or daily bar. During a bear trend, there is typically much less support than resistance, and as a high is a high is a high, you can quite readily identify resistance on a 5 minute chart (or a tic chart, range chart, hourly chart or daily bar chart).

S/R is as exact as it has to be, which is to say that when trading support and resistance, "almost" is often close enough.

You seem to use moving averages in your definition of S/R. While some moving averages do appear to act as "dynamic" s/r during trends and counter trend movements, most would agree that during trading ranges MA's are good for nothing other than telling you that price is in a trading range because the MA's are all knotted up. This is not to disparage MA's and I keep some around myself for the value they have during trending moves - tey can also be quite handy in defining various conditions to enter trades. But if price is trading below the moving average and above the prior day's high, I am not going to disregard a buy signal at the test of that high as support just because price is below the MA.

S/R will define the extremes of that range, however. Price action at those levels will convey information. This information will allow a price action trader to make a profit, limit losses to a fraction of the potential profit, and reverse position when necessary. There is no information available to the day trader as valuable as yesterday's high, low, and close, and today's open. Each level will not have the same value on any given day. For example, yesterday, 6/4/2019, it was the 6/3 high that became the pivotal point of the day. The 6/4 open thus became a bull above/bear below level once buyers showed immense interest above the 6/3 high...............
More...
%% Almost all true;
except the 5 minute high or low of the day is frequently different from 55 minutes-60minutes or 5 hours. high of day.Actually, you're right i never said moving averages do work; we have to do the work.

Dont really hate 5 minute candle or the fact they have many more errors than 5 hour charts;that would explain partly why 52 week high/low matters more than 5.2 hours.
My post on sunday about one days supporT noT meaning much @ all; was when the market ,QQQ was much more bearish, as your first paragraph implied.[:D:D, :D:D:D:D:D:D And before the Fed head bullish hint LOL-LOL]
 
You must log in or register to reply here.
Back
Top