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.

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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hey, thanks, nice attachment
 
Quote from SCNinvestor:

hey, thanks, nice attachment
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No problem hope it helps.

The volatility this month has been immense, I personally have been taking fewer trades and looking for entries +/- 2.5 points from the levels rather than my normal 1.5 maximum.

Also I have been using 2-3 point stops. The moves have been spectacular. Although I have been taking fewer trades the moves with the trades I have taken have been sensational.

This is the kind of market where it seems from the reports I have read only day traders are making consistent money.
 
Quote from ESResistance:

Hi everyone

Please find attached todays levels.

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
More...

thanks, but im wondering, why do sometimes the levels change, doesn't the market have price memory?
 
Quote from bbqbbq:

thanks, but im wondering, why do sometimes the levels change, doesn't the market have price memory?
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They change based upon my own assessment of probability. i.e. how easy is it to spot that level? how much respect has it been getting? day to day this kind of analysis evolves with the market. The levels I post are my pre market levels, during the day I also create intraday levels (still based upon 1hr chart).

The market certainly does have "memory" however like people the market has a better memory for recent events, and if recently the level has become obscure, or simply not working. The market will "remember" other areas that are more obvious.
 
I've heard many times from many traders on the net "Simple S&R is all one needs" but I could never really make it work for me.

Until now. It's very rare to find someone on ET showing a useful technique and being so open about it. So first I want to say thank you to ESSupportResistance for teaching me about S&R.

I've been playing with the ideas shared in the thread and looking back over the charts from September (October is too volatile).

One question I have is what if the price is in between two pivots and we get the other criteria (outside of BB for price and tick)? I ask because I've seen this happen and price continued up towards the next resistance instead of coming back to the MA. Is this something you just get a feel for by practice?

The other thing I'm looking at is the use of the TICK index. I've used this on a daily level but never intraday. I find it very interesting.

One thing I'm wondering about is if the TICK is going outside its BB, that could signal the beginning of a big move. It would seem to be that the return of the TICK towards the MA would be more of a trigger than just being outside of the BB. Does this make sense?

Thanks to everyone who have contributed to this thread and I hope we can continue learning and refining the technique.
 
Quote from verdo:

hello

where do you find the tick index?

thanks
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Depends on your data provider. If you're using IB, you can use TICK-NYSE. For IQFeed it's TICK.Z. It's different for each data provider.
 
Hi Cunparis

Thanks for your message.

The $TICK is an interesting instrument, what extremes tell us is that we are in a movement that is unlikely to be sustained. I know a trader whose methodology is based solely around $tick extremes, he doesnt care about S/R or BB extremes and spends his day scalping based purely on $tick extremes.

With this in mind...the 1 min BB and $tick extreme it self is a very powerful signal and can be used independently of S/R. However when combined with S/R we have some very high probability plays.

Quote from cunparis: One question I have is what if the price is in between two pivots and we get the other criteria (outside of BB for price and tick)? I ask because I've seen this happen and price continued up towards the next resistance instead of coming back to the MA. Is this something you just get a feel for by practice?
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Not sure exactly what you mean here, but the $tick extreme combined with price extreme alone does offer good odds. Practice and getting a "feel" for the market takes time, and is an investment that has to be made to be successful.


Quote from cunparis: One thing I'm wondering about is if the TICK is going outside its BB, that could signal the beginning of a big move. It would seem to be that the return of the TICK towards the MA would be more of a trigger than just being outside of the BB. Does this make sense?
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I'm guessing you mean a tick extreme which then pulls back to the midline and offers the opportunity to get in with the new trend (bigger move)? Sounds like a a good trend trading method. Personally I am a counter trend trader. I like to be in "at the turn" taking profits at my first 2 targets whilst everyone else is umming and ahhing as to whether they have confirmation to even enter the trade.

Because I am entering my trade at the inflection point, when the sellers overwhelm the buyers and vice versa. I like to really stack the odds in my favour before I enter a trade S/R, $tick extreme, price extreme. Price action look good? Then its of to the races!

Hope this helps, if I have misunderstood your questions feel free to ask for clarity.
 
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