Most Useful S/R Lines for Intraday Trading Levels??

[2FT]

I enjoyed thinking about your points.

But to be honest, I would have hit H[1] and L[1] like a red headed step son. If I saw price react to them like in that chart.

ps, your open +5 blue line shows nice roll reversal S -> R.

And 171.55

 

[Real Money]

The problem with support and resistance lines is that it's too simple. Look at the volumes, I circled interest rate in red and index in yellow.

There is huge amounts of money moving through the rate futures.

7.5 TRILLION DOLLARS (AVERAGE DAILY VOLUME)

Think about that for a second.

401(k) are spread between these two assets and everybody is trying to take their money or make money off of them moving their money. LOL

(1) The ES can rally if bonds sell off
(2) The ES can drop if bonds rally
(3) The ES can rise or fall with bonds and then (1) or (2) happens
(4) Any combination of all three

You have to think about it like this. Support/Resistance is the bond market price action. Also, the international indexes interact with the price moves in ES. There is other stuff but these are the really important ones.

 

[kaizer]

You have to think about it like this. Support/Resistance is the bond market price action. Also, the international indexes interact with the price moves in ES. There is other stuff but these are the really important ones.

For retail daytrader the buity of bond futures is slow motion and low risk both market and operational. Years ago I fired many thousands euros trying to master daytrading DAX, than ES, NQ and also CL. Thanks to @Handle123 and his post regarding daytrading FGBL, after I switched to FGBL (Euro Bund future) trading became calm and profitable. Following index futures was fun, but no money for me. Following FGBL is boring but profitable. Trading industry promote indexes for newbies (especially ES) so index futures is starting point for many. Granted if it's profitable, but if not, especially because of operational risks, bonds are possible way to go.

 

[dozu888]

If the prophecy is self-fulfilled... then isn't it real? I think I agree with your observation though, that it is like a house of cards. But if it increases probability, then I don't really care that the mass psychology of a round number (or even dollar amount) is not a true reflection of a company's fundamentals. What matters to me is where the price is going over the course of the next hour or so, not week or decade.

Excellent point and thank you for clarifying.

yeah the 'house of cards' kind of supply/demand will only provide minimal tradable edge, if any at all.

imagine this - say there is popular belief that yesterday's high/low is resistance/support... so people back test and put on trades and are successful... soon enough there are so many people doing this... another group of guys figure out that if they just punch thru the lines all these guys will have to close their positions at a loss... so the 2nd group of guys find success but eventually this method gets crowded and here comes the 3rd group of guys to kill the 2nd group... it's like a dog chase the tail and the cycle goes on.. this is why there are so many people out there call themselves 'system traders' and in the long term they all just break even, with the very lucky and very smart few who can adjust well enough to be successful.

 

[dozu888]

some more random thoughts..

- trading style is not just a personal taste thing... there are better ways (event driven, true demand/supply) vs. inferior ways (bs driven lol)

- and perhaps in this current environment, no trading is the best trading.... take AAPL - you could do the classic earning run play and make a bundle in the 2-3 weeks into the release.... but look at their bond yield: 2.3%..... nobody can explain to me why bond buyers are this stupid.... they fork over cash to get 2.3%, while apple use this to buy back stocks yielding 5.2%... almost a free 3% spread as a gift to the buy back.... does that mean AAPL should be priced at $500 today? and why not? 3.5 years ago I had this thread 'are we gonna run out of shares'... still nobody can answer this question... but anyone who paid attention could have just gone all in and make a boat load.

 

[qlai]

I’ve never found prior day stats to be useful for establishing intraday bias.

Who said anything about bias? Just silly lines that may or may not be meaningful on a particular day and time for a particular stock you happened to be watching. No bias.

 

[digitalnomad]

Who said anything about bias? Just silly lines that may or may not be meaningful on a particular day and time for a particular stock you happened to be watching. No bias.

The bias is the context/meaning behind the lines, unless you’re market making.

 

[KCalhoun]

#1 value of prior day charts is to see pd high; best to trade above it/ "out" vs in charts, like PDD yesterday; agree re current day liquidity most important, so i also use pd chart to see same-time volume vs current day:

also helps avoid false b/o's, i often wait til .2 - .3 above pd high before entering; here's AAL:

 

[imjohn]

I have found that I am putting way too many horizontal Support and Resistance lines on my day trading chart. I am guessing I am going back too far.

Which horizontal S/R are the most helpful for intraday trading?? Which are the ones I should be charting, and which ones are the ones that are not very important??

Thanks in advance.

-Lindsay

I intraday trade during RTH. Each day, the "left edge" of my screen begins with the prior ETH. I will take note of any S/R levels established during ETH, but whether I give them consideration (draw a line) depends on the range and structure. I don't plot lines for S/R levels established in prior trading days. I don't even look for them.

For the specific Qs, I don't know what the right answers could be (for you or for any other trader). But for myself, I've determined:

Which horizontal S/R is the most helpful? Most recent one
Which ones I should be charting? Most recent one
Which ones are not very important? Anything before/except most recent one.

I trade multiple time frames and do occasionally get opposing S/R lines, in which case the HTF wins.

 

[lbhere]

I rarely have more than three levels within the daily ATR. You're looking for levels of significance. Sometimes only one important level is all you need to have in the day's trading range. Here's an example below of PG, from October 22, 2019. The price of $121.66 was very close to the following historic events, and so earned a spot as a horizontal line on my chart prior to market open on October 22, 2019:

• Previous all-time high that was set on July 30, 2019 ($121.76) with a long top wick on the daily candle, followed by four red days, indicating significant resistance at that price. This alone makes this price very important.
• That region ($121.40 through $121.80) also served as both support and resistance between August 28, 2019 and September 20, 2019
• The weekly opening price on Monday, October 14, 2019 was $121.62

I had the level $121.66 drawn prior to market open on October 22, 2019. Lo and Behold it bounced right off of it (well, within 6 cents).

Again, you want to identify levels that are significant and meaningful. If you only draw levels that represent areas or prices with historical significance, then you really shouldn't have an intraday chart that is cluttered with horizontal lines. When I end up with too many lines, I'll try to delete the ones that seem less significant to end up with only two or three per average daily trading range.

Thanks, JeffB. Much appreicated.