Support and resistance are all relative. If the PA drops further, then that support is just a continuation of downtrend and could become the new resistance and if the PA keeps going up then that resistance is just a continuation of an uptrend and could become the new support. People have blown up by buying support which is called bottom fishing and selling resistance which can get them short-squeezed which is even more dangerous.
Possibly Important TA Tops...
- Thread starter Scataphagos
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Support and resistance are all relative. If the PA drops further, then that support is just a continuation of downtrend and could become the new resistance and if the PA keeps going up then that resistance is just a continuation of an uptrend and could become the new support. People have blown up by buying support which is called bottom fishing and selling resistance which can get them short-squeezed which is even more dangerous.
Stops. Stops! You've heard of those, right? Players blow up from failure to exercise discipline.
Ok so putting in stop-loss at the right PA level is what stops traders from blowing up, not buying at support and selling at resistance. LOL
Scataphagos is a good indicator himself. Whatever he says, do the opposite.
I hope I am not off topic, but after reading yet another hopeless thread, I feel the need to let out some steam. Apart from two or three experienced traders on ET the rest are just here to show off that they have made it.
Scataphagos can trade and he does make money trading S/R levels but.. if you look at any chart you can see S/R levels only work about 20% of the time, there is a lot more to trading S/R than drawing couple of lines.
Scataphagos can trade and he does make money trading S/R levels but.. if you look at any chart you can see S/R levels only work about 20% of the time, there is a lot more to trading S/R than drawing couple of lines.
aloha Tony,
I see it exactly opposite as you. Well mapped s/r lines work about 80% of the time.
See how quick the initial sell off was at the first top of the double top? Price went sharply up the rushed back down, without there being much of a horizontal move. That’s usually a hint price will return to near that high. i only watch es but don’t see immediate /sharp reversals happen often
Next, see how quickly price rushed towards that same high on its way to making the double top? Another hint you’ll probably make a double top (keep in mind it probably won’t be to the tick and could over/under shoot it). Regardless, only 20% chance of immediate continuation up (s/r failing)
You need that second (potentially last) push up, before you could see an actual reversal materialize. That s/r channel would be the horizontal move needed prior to a reversal
Good point mister.
SR level work ~20% of the time.
And there is a lot more to trading S/R than drawing a couple of lines.
Based on OP's posting #1,
I doubt OP has the edge.
Did you take these trades in live market ?
This is a 4H timeframe of the same chart. You still see double top ?
If you look at my last post the price never got to the resistance line, he just moved the line lower after the move.
It may work for those who trade the Daily/Weekly charts with 100 points S/L