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

[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.

Good trading all

 

[makd1234]

Haven't read the entire thread as it's too long, sorry if these questions have already been asked.

Firstly, the SMA's you list. I assume they refer to ES itself rather than the actual S&P? I was wondering what the 'Big Boys' take their SMA values from - the futures or the index itself? Anybody in this list who has worked for the investment banks can shed any light on this?

Second, looking at the pivot points it appears to my untrained eye that a computer program/custom study could be written to automatically generate the PPs, instead of visually identifying support/resistance. Haven't seen something like that before, so I'm assuming it can't be done or somebody has actually written it - and they are keeping it for themselves!

 

[xburbx]

you might be able to have a computer program that calculates ESR's points, but I would advise learning to pick them out yourself. It has given me a much better feel for the market rather than letting a program tell me where they go. It's just my opinion and I spent a lot of time studying the points he picks every day and then it clicked. My goal was to be able to open his chart and have my lines already picked out and to see if they lined up. They do.

 

[makd1234]

I'm in pretty much the same boat as you ,Xburbx, and I've only been looking at ESR's points for about two months! I can now pick out pivot points for myself - including some that he misses....however, for the sake of completion (basically a human missing points that a computer wouldn't miss) it would sure be useful to have an automated system as well.

Nobody is around for ever, and I'm sure ESR will one day hang up his coat and stop producing these point lists, so I suppose that's another reason a pivot point program would be useful....maybe then ESR can retire early!

 

[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.

Good trading all

 

[sunsetisles]

My personal variation of the so-called Floor Traders' Pivots is computer generated. I refer to these horizontal zones (rather than specific price points) as static s/r's. (bright colored)

Also, my proprietary dynamic s/r's are computer generated. Their thickness indicates "strength" of the zone. Most of a day's price action takes place between the static s/r's, and the dynamic s/r's provide trade setups based on such location. (dark grey)

The plotting of linear regression channels to encapsulate swings, provides mathematically sound geometric structures to trade either trading range markets or trend day markets which can be determined quite early in the trading session with high probability.

The computer generated olored-coded bars are rendered by a proprietary bid/ask volume, tick analysis engine. These bars are vital in determining the probability of reversal or penetration of s/r's, intra-channel price reversion to the mean etc.

Chart: ES, 1 pt. constant range bars, 24 hour, continuous.

 

[xburbx]

Just curious as to how the bars that signal reversal are calculated?

Quote from sunsetisles:

My personal variation of the so-called Floor Traders' Pivots is computer generated. I refer to these horizontal zones (rather than specific price points) as static s/r's. (bright colored)

Also, my proprietary dynamic s/r's are computer generated. Their thickness indicates "strength" of the zone. Most of a day's price action takes place between the static s/r's, and the dynamic s/r's provide trade setups based on such location. (dark grey)

The plotting of linear regression channels to encapsulate swings, provides mathematically sound geometric structures to trade either trading range markets or trend day markets which can be determined quite early in the trading session with high probability.

The computer generated olored-coded bars are rendered by a proprietary bid/ask volume, tick analysis engine. These bars are vital in determining the probability of reversal or penetration of s/r's, intra-channel price reversion to the mean etc.

Chart: ES, 1 pt. constant range bars, 24 hour, continuous.

 

[sunsetisles]

Quote from xburbx:

Just curious as to how the bars that signal reversal are calculated?

xburbx,

Each bar is a real-time video of the continuous, two-way auction market in which buyers compete with other buyers as do sellers with other sellers.

Price movement occurs: when buyers/sellers become most aggressive, buyers taking offers, as opposed to waiting for bids to be hit; sellers become most aggressive when hitting bids rather than waiting for offers to be taken. Based on contract volume, relative buyer aggressiveness is visualized by green bars of different shades. Relative seller aggressiveness is measured by red bars of different shades. Contract volume may be filtered to exclude trades less than X contracts to isolate large traders.

Reversal bars, orange and yellow, are based on a proprietary algorithm which analyzes ticks. (Today's markets are dominated by algo trading which slices and dices size in the attempt to disguise intentions.)

White reversal bars are based on a proprietary algorithm which analyses contract volume.

(Before the dominance of electronic markets, floor traders obtained this information by proximity to order flow.
From personal experience, I can tell you that this edge was better than an ace up your sleeve. My tools attempt to visualize this information on screen.)

Orange, yellow and white bars may be continuation bars depending on their location in the swing leg.

As previously mentioned, confluence is all important...reversal/continuation bars at static or dynamic s/r's as well as intra-channel reversals and channel breakouts and breakdowns.

Hope this helps.

 

[xburbx]

Interesting. It's like a candle version of the t&s then , correct? Is this something you created or something available for download?

Quote from sunsetisles:

xburbx,

Each bar is a real-time video of the continuous, two-way auction market in which buyers compete with other buyers as do sellers with other sellers.

Price movement occurs: when buyers/sellers become most aggressive, buyers taking offers, as opposed to waiting for bids to be hit; sellers become most aggressive when hitting bids rather than waiting for offers to be taken. Based on contract volume, relative buyer aggressiveness is visualized by green bars of different shades. Relative seller aggressiveness is measured by red bars of different shades. Contract volume may be filtered to exclude trades less than X contracts to isolate large traders.

Reversal bars, orange and yellow, are based on a proprietary algorithm which analyzes ticks. (Today's markets are dominated by algo trading which slices and dices size in the attempt to disguise intentions.)

White reversal bars are based on a proprietary algorithm which analyses contract volume.

(Before the dominance of electronic markets, floor traders obtained this information by proximity to order flow.
From personal experience, I can tell you that this edge was better than an ace up your sleeve. My tools attempt to visualize this information on screen.)

Orange, yellow and white bars may be continuation bars depending on their location in the swing leg.

As previously mentioned, confluence is all important...reversal/continuation bars at static or dynamic s/r's as well as intra-channel reversals and channel breakouts and breakdowns.

Hope this helps.

 

[makd1234]

Quote from sunsetisles:

xburbx,



Reversal bars, orange and yellow, are based on a proprietary algorithm which analyzes ticks. (Today's markets are dominated by algo trading which slices and dices size in the attempt to disguise intentions.)

White reversal bars are based on a proprietary algorithm which analyses contract volume.



Hope this helps.

Apart from the reversal algos you use, everything else seems too much to think about when I'm trying to make a decision on a trade. Keeping it simple seems the best way.

That system you have almost seems like it could trade by itself - where's the fun (or stress ) in that?