Indicators are liars! Support and Resistance Trading for the S&P emini

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Quote from ESResistance:

Hi everyone

Please find attached todays levels. The S/R numbers are in the black column, the MP, Pivots, Fibs, Simple Moving Averages and Summary Numbers are for confluence and information.

Always remember to use the numbers as a guideline for potential areas of high probability plays.

Always use a set up based upon your system to enter a trade
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Good trading all
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G'day ESR

Very interested to see your addition of the SMA - good potential for S/R in these areas.

I am curious as to your basis for arriving at the SMA values... I've calculated based on closing price, average of high/low/close, etc, and do not get the exact same figures as you (whereas all my other figures - Fibs, Market Profile, Pivots - are exactly the same as yours).

See ya m8,
Preach :)
 
Quote from Preacher Man:

G'day ESR

Very interested to see your addition of the SMA - good potential for S/R in these areas.

I am curious as to your basis for arriving at the SMA values... I've calculated based on closing price, average of high/low/close, etc, and do not get the exact same figures as you (whereas all my other figures - Fibs, Market Profile, Pivots - are exactly the same as yours).

See ya m8,
Preach :)
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Hey Preach

SMA values are from a daily chart. They are the values shown on the 24hr ES chart when I put the numbers together (around 4am EST). The numbers especially for the faster SMA's can vary throughout the day, but they are a good thing to keep an eye on as a lot of traders do watch the reaction of price at Moving averages.
 
Hi everyone

Please find attached todays levels on possibly one of the greatest days in the history of the world. The S/R numbers are in the black column, the MP, Pivots, Fibs, Simple Moving Averages and Summary Numbers are for confluence and information.

Always remember to use the numbers as a guideline for potential areas of high probability plays.

Always use a set up based upon your system to enter a trade
.
Good trading all
 

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Had an S/R line at 985 which lined up with .5 fib. Price approached it very quickly at 9:34 and it was outside of the BB. I was hesitant to place the trade because of how quickly it was heading to the line but I gambled that the support would hold because of the strength. It turned out to be a smart trade. Then price retraced to the line pretty quickly and I stayed away because it was inside the BB and it was too soon of an approach to the line again. I remember what ESR had said about when price approaches a line again in a short time frame so it also turned out to be a good choice because I would have been stopped out.
 
Let's say we enter long on support and now stay long and price approaches the next resistance level. And price is at the upper bollinger band.

Do we reverse and go short?

I ask because this is exactly what I did and I got burned pretty bad by the Euro. It staged a pretty big breakout. But because it was outside it's BB and just breaking out of a trendline, I doubled my position (still short). I'm waiting for it to come back down a bit before I reverse to go long.
 
Great high probability set ups are nice. However trade management is the most important aspect of trading.

I do have losing trades, even with S/R, lots of confluences and the most perfect set up. I like to look for reversals, that is my style, however break outs can happen at levels also and you have to be willing to adapt when you level is not being shown respect.

I have never done particularly well with break out trading and so try to cut my loss as quickly as possible and reassess the situation.

Most importantly I try to ensure that my winners on average are 3 times larger than my losers. Its this management concept that you need to transfer over to fx to be successful not just the set up.

Taking a loss is always tough. and if you are forced to do that, try your best to learn from it. Adapt and Overcome.

Quote from cunparis:

Let's say we enter long on support and now stay long and price approaches the next resistance level. And price is at the upper bollinger band.

Do we reverse and go short?

I ask because this is exactly what I did and I got burned pretty bad by the Euro. It staged a pretty big breakout. But because it was outside it's BB and just breaking out of a trendline, I doubled my position (still short). I'm waiting for it to come back down a bit before I reverse to go long.
More...
 
Quote from ESResistance:

Most importantly I try to ensure that my winners on average are 3 times larger than my losers. Its this management concept that you need to transfer over to fx to be successful not just the set up.

Taking a loss is always tough. and if you are forced to do that, try your best to learn from it. Adapt and Overcome.
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I'm trading currency futures, not forex. I've heard too many bad things about forex, not sure if they're true but I understand futures so I stick with that.

I understand the 3:1 part. I often try to get a setup that is at least 3:1. The problem is we may know the ratio but we don't know the percentage (well without a mechanical strategy or years of experience).

I'm just curious if most people would take the reversal. From what I've seen price often will reverse at least temporarily and then maybe continue up. I am trying to learn how to read volume, candlesticks, and price action in general to try and anticipate a breakout or reversal and be prepared.

Sometimes I've taken profit at the next resistance level.. only to see price continue up for a while. And I've also reversed to see it breakout. And I've held long to see it fail. It seems easy to be on the wrong side when approaching resistance.

Your BB idea is a big help. That can give a hint of what's going to happen but even then usually breakouts will have price at the BB extreme. But if price is within the BB, near the center even, then I think it's more likely to overcome resistance. However that could be completely false, since one could argue that being above the BB means it has a lot of energy, which is required for a breakout.

My problem today was that I put too much emphasis on S/R from my 15 min chart.

PS: I stayed short on that euro breakout since it was out of the BB and other markets were going lower. I actually tripled my position because it was on a down trend line. It ended up coming back down and I got out breakeven. That was a relief. The euro was really moving today.
 
Hey Cunparis

I do also trade some fx and look at the 4hr and 1 hr TFs (I dont go lower than that for S/R

I dont know if the futures prices are the same, but if you look at a 4hr EURUSD chart and draw a line at 3116 you will notice it caught todays high to the pip. That area has been used as S and R fairly recently. I have marked up and attached the chart for you.

Its very important that if you are trading levels for reversal the odds of success are far higher using levels from 1hr time frames and above.

I swing trade fx mainly and have found using my BB set up in fx to be less effective. As such I base my entry ONLY on the level. No set up. I find a level I like on the 4hr chart, put an alert on my platform when I get an email on my phone telling me we are close to the level, I put my order in. My levels in fx are mainly derived from the 4hr chart.

The ES is a different beast it is much more responsive to S/R from the 1hr time frame and thus easier to day trade than fx (in my opinion).

Hope that helps
 

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Quote from ESResistance:

Hey Cunparis

I do also trade some fx and look at the 4hr and 1 hr TFs (I dont go lower than that for S/R

I dont know if the futures prices are the same, but if you look at a 4hr EURUSD chart and draw a line at 3116 you will notice it caught todays high to the pip. That area has been used as S and R fairly recently. I have marked up and attached the chart for you.

Its very important that if you are trading levels for reversal the odds of success are far higher using levels from 1hr time frames and above.

I swing trade fx mainly and have found using my BB set up in fx to be less effective. As such I base my entry ONLY on the level. No set up. I find a level I like on the 4hr chart, put an alert on my platform when I get an email on my phone telling me we are close to the level, I put my order in. My levels in fx are mainly derived from the 4hr chart.

The ES is a different beast it is much more responsive to S/R from the 1hr time frame and thus easier to day trade than fx (in my opinion).

Hope that helps
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Since you trade ES & Forex, is it better to trade Forex for currencies or Futures? The main problem with futures for me is the liquidity.. outside normal trading hours for the US, the liquidity is pretty bad.

My chart is very similar to yours. What I don't get is how you drew the top line? I drew mine connecting the top of the highest bar. Actually I drew the line in from before and it just happened to hit the top of the highest bar.

Thanks for posting your chart. Mine is pretty similar. I may have too many lines. I'm having a hard time deciding whether to include a line or not. So I look for lines that have offered S/R twice or more.

The arrows are where I went long (green) and then short (red). As you can see there was a false breakout above the resistance there, that's where I held short (tripled up) and got out even. I got lucky on that one.

I made a lot of mistakes today, I stupidly took some trades in between S/R. I will not do that again. I ended up profitable and part of that is due to you sharing your technique. Before I was relying on trendlines. Now I use the two together (you can see them in purple).

I think the Euro will breakout to the upside. I tried several times to get in but got stopped out around 1.29 on futures. The exact prices don't match up because with futures they're higher to account for interest.
 

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Liquidity wise forex.

I have not really had any problems trading forex. If you use a reputable broker rather than a bucket shop you should be fine.
 
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