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

[lbhere]

That's dependant on the type of trading you do, even within intra-day trading. Basically, imho, you need to identify where you will be in sync with the rest of participants trading on your timeframe(s).
I display:
Previous day's high, low, close.
Today's open, high, low
If stock is active pre-market, pre-market high/low.

Anything prior to that of interest, I set up alerts.

Thank you. I have been going back on a one-hour chart using the highs and lows to mark areas that will possibly be S/R on my 5 min. chart. I find that even though I am sometimes going back more than a week or two, that often these areas are hit AGAIN and price does pullback or stop at these places. Obviously, in strong trends, sometimes they are passed by. But price has 95% of the time STOPPED exactly on one of the horizontal lines I have drawn. But it seems a little haphazard now, and my chart is a bit cluttered.

I am realizing now, after reading all the comments, that I need to do my own homework and go back and try to figure out which lines are the ones working for me and which ones are not. But, honestly, it has been fascinating to watch price stop or pause almost every single time on one of them.

 

[lbhere]

I really don't understand your take on this. Do you not believe that supply and demand is a real factor in price discovery? What do you believe is the mechanism that causes the instrument's price to change? Have you never watched the DOM real-time?

Humans are the ones directly buying/selling and they are the ones programming the bots. When used correctly, support and resistance are objectively verifiable as a useful leading indicator (along with the DOM). Obviously they aren't magic and price may plow right through them, but that doesn't mean that a significant level is "bs." So I agree that S/R all by itself is simply not enough - not even close. But if the level happens to be one of four or five different signals that are all saying the same thing, then the odds are just that much more in your favor.

Personally, I have found support and resistance (supply and demand) to be far more useful than any moving-average-based indicator. Of course you can point out that I'm not profitable, invalidating everything I've said. And that would be fair.

But just in conceptual terms, it is so much easier for me to prove that they provide some usefulness than it would be for you to prove that they can never offer anyone any usefulness. So your comment here just seems... like... I don't know, like you're really just trying to say that we shouldn't even be wasting our time daytrading. Which, you know, -sigh- I don't know. I guess we need guys like you trying to inject some sanity into our lives.

Yes, thank you, Jeff. It would be so nice if people would just follow the adage,"If it doesn't apply, let it fly," as I find so many people here seem to want to ridicule and tear ideas down, old, new or wise or unwise, instead of providing something more constructive, such as a BETTER approach. lol

But the fact IS that price DOES indeed stop (either as a breather or as a reversal) at one of my horizontal lines 95% of the time. I guess it is up to me to go back through my own charts and try to recognize which lines these are happening on.

It would be nice to have more constructive answers such as yours, whether one agrees OR whether one disagrees.

 

[lbhere]

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.

LOL. Got it. Thank you.

 

[lbhere]

Good post. You can tell a level matters just by watching and feeling the DOM as price approaches that level. It is the only pulse that the market has. Nearly everyone is there to make money from movement, they have to look at something to do that. And it is not a making secret formula.

You can watch a market trade on purpose back and forth between levels that for what ever reason, has been chose for a time period to remain as targets. there is no reason for it to go from one edge of a range and back and bak again. It is participants pushing it there to pick up money on the ride. Some days, all you have to do is join the party. Which is actually what the participants pushing to and from those targets want, so don't get suckered in the end.

To the OP, look at wide and significant low volume areas that were set when the market re-priced from one area to another on a sentiment/fundamental shift. So long as that shift remains true, then the edge of that LVA acts as great S/R. You want them to be wide LVA's, and based on a clear change in reasoning and a re-pricing of the market.

Also look for S becoming R. So called break pullback out retests. They are give away trades. And if you are wrong, C&R for a possible rocket back to the other side of the range and a BO in that direction.

Warning: forget these so called S/R levels on days with large volume driving one direction. Or expect a few levels to wash and wider target to eventually hold.

Very informative and helpful. Much appreicated.

 

[lbhere]

I daytrade FGBL future so I use:

1. pivot levels (swing high/low points, do not confuse with somehow calculated levels) from 60 min and daily charts
2. current day's open price

as filters when NOT to trade.

I expect that near these levels (1) relatevely big positions are at breakeven and the battle buyers VS sellers could take place. This means chop price action on my trading chart. Opening price (2) means the level when current day became positive or negative and this also is dangerous point for me. If I see signal according my plan but (1) or (2) level is 6 ticks or less this means no trade for me.

If I would trade fast paced market (Lord saved me from this ) like CL, GC or ES/NQ/YM can suppose that 60 min levels are not enough and one should look at 15 min or even 5 min. And the offset should be greater than 6 ticks. But not sure.

My take: try to look at S/R bottom up, not when to trade, but when not to trade.

Look at chart attached and you will see what I mean.

Holy SH*T. I think I have been naming my horizontal lines incorrectly! I USE (and therefore meant) the Swing Highs and Lows, as well. I thought these were Support and Resistance. I guess I have been using Pivot Points.

I use them on the same time frames as you do, just a different instrument. They seem to work well, but I have many from days past still one my chart. The problem is that sometimes one of the older ones is a place where price does indeed slow or turn around.

Do you find some pivots more consistent than others?? Daily H, L versus overnight H,L versus intraday H,L from the day before versus intraday H,L from current day?? Just curious what you have found.

Thank you for enlightening me.

 

[lbhere]

for decades i've used prior day hi/low/close, and whole numbers, and mean reversions/50% pullback levels

Thank you for answering me. I think I have been using the words S/R lines incorrectly?? I use the highs and lows myself, but off a 1-hour chart, then, if new day's price is still close to yesterday's range, which most times it is, I use a 15-min. chart to chart all the pivots off the previous day's chart (including the day's H,L and close)....plus, I am using H,L from the evening/early morn. trading hours.

See...a bit of clutter.

I guess what I should have done first is go back on my own charts and try to see if there is any rhyme or reason to which ones are most often areas where price has stopped or reversed. 95% of the time price does stop at ONE of the lines, often the second one up or down the chart, sometimes the first.

 

[lbhere]

#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:

View attachment 212031

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

View attachment 212032

Following this, do you then short anything a few cents below prior day's low??

 

[2FT]

Very informative and helpful. Much appreicated.

Pleasure.

BTW, in my post, "break pullback out retests" = "break out pullback retests". :-/ oops.

And I use the terms "S/R" as rather meaningless easy to write labels for any number of horizontal lines I might draw for any number of reasons. S/R actually should have meaning. I misuse the terms out of convenience.

To your original question: A pragmatic start is to look at the previous o/n and also the previous day session for say 1 hour bars, draw swing high and lows from that for today's day trading session onto your day-trading time frame. And draw major swings from day and weeks and even months ago. They matter.

Alternative or complimentary (up to you): Don't use the H/L as levels, use the Value Area H/L from yesterday cash and o/n. The true high is interesting as an extreme, but the high of the value area incorporates more information.

Then spend a long time staring at that chart. Just looking at it for a long time before open. And ask yourself over and over:
- given the sentiment, what level does the market want to test today?
- given the fundamentals, ditto
- given uncertainty, ditto
The less change in news/events/sentiment during a session, the more likely extreme levels set during the previous shift in those fundamental facets will hold.

- does a correlated market have a S/R level in the equivalent position?

- if the o/n high is hit today, what kind of news would it take to break it and hold above?
- if level x is hit and holds, where will price go next? It usually wont just sit there. The market is searching. Searching for liquidity, for trade facilitation, for value. For response. For clues.
- if level Y is hit in pre-market, or near the open, and is rejected... what will that mean?
- write on your trade blotter/pad what you think the widest range could be today. eg, bad news on China trade, how far back down, what level? If that breaks, what next? I bet you will pick it.

etc etc etc. Note: they are hypothetical/example questions. Use what ever you like. Just meditate on that structure chart until you are so calm and open minded that when the market opens it is like hanging out with old friends. See what reality deals, and deal with that. It's only trading.

Remember, the market wants to test these levels. It wants to know. It needs to do business, and it needs to know how and where and with who it can do that business. It wants to test that round number big figure 20 prices higher, just to see if it is rejected. Then the market knows. The market is not a moving graphic on a computer screen. It is people, with a need to satisfy intentions v.s. uncertainty. And a need to make money.

Also, important to form a pretty quick read on the type of day that is unfolding. And then view your S/R levels through that prism. It makes a big difference. If you watch the ladder closely, you can see participants form their opinions on certain days. Even the obvious absence of any clear opinions expressed in the ladder is an opinion. You have to know your market, like your pet dog of 8 years knows you. Like you know your weather and local fishing spot, or surfing spot, or mountain spot. Or what ever it is in your life that requires an innate read of the environment. That moment of... "I've seen this before"...

On certain days, you will see and "feel" that the smarter participants have already decided what is most likely to unfold today not long after the opening price action revealed itself to the world, and they start gaming for it....

Once a week (figure of speech) I see them set up for a T2V trade (trade to volume). They put volume on the ladder well away from the open at an obvious level. And then damn me if they don't slowly trade at market all day toward their resting offers, build a position, to then exit their positions at limit later on, preferably by bumping some stops to get their fills. Some news can interrupt their plan. And some big seller with other ideas will also slow it down. But on some days, they grind away trading market to limit... and buy diamonds on the way home. DO NOT ignore the slow GrindTrend days! A participant, or an underlying subtle but reliable sentiment, owns that market that day. They have a plan. Get on board with them! No one said it had to be a fast win, or a glam win. I saw it in the JGB futures yesterday. A big cloud of resting offers near 154.00 (a big figure R level). "They" paid offers slowly all day to get there, with far more trade being taken on the offer (market orders) along the way. And then when we did hit the level, perfect rejection of Resistance as profit was taken, sold back towards the open. Diamonds.

ps, JGB's are thin, expensive, and nuanced. But an interesting market in Asia. Regulators watch closely for spoofing and bust few participants from time to time.

pps, in some markets, I see clusters of large resting orders on the ladder that get filled all the time. They want to be filled, and they want to be seen.

Enjoy the essay. I did my pre-market prep, then something unrelated happened and am now not trading today. So that energy had to go somewhere.

Make some money.

 

[digitalnomad]

I have been going back on a one-hour chart using the highs and lows to mark areas that will possibly be S/R on my 5 min. chart. I find that even though I am sometimes going back more than a week or two, that often these areas are hit AGAIN and price does pullback or stop at these places. Obviously, in strong trends, sometimes they are passed by. But price has 95% of the time STOPPED exactly on one of the horizontal lines I have drawn. But it seems a little haphazard now, and my chart is a bit cluttered.

You're doing this very wrong. After the market opens you'd be better off flipping a coin, than looking at anything that happened before the open. All that matters is what happened seconds before you take your position, and attempt to do slightly better than random/coin flip upon entry, and then expand your ranges (stops/targets) post-entry based on broader stats/studies.

 

[zentrader]

Create a few charts with random data and you will see all the TA patterns, prices bouncing off support/resistance etc.

Market is a forward looking discount mechanism. Anything that happened in the past is largely priced in/irrelevant. There is no edge in looking at a chart and drawing a few lines - if that were the case there would be loads of hedge funds proudly proclaiming this as their strategy.

One could spend years on this TA nonsense and slowly descend into madness along the way.