Question on support and resistance

M

Merrin

Stock xyz is at a key support level and it can go either side from here and it looks like it's going to be a big move.
I've tried a lot of things, usually get stopped out a number of times and when I finally get fed up, the real move starts, usually in the opposite direction everyone is expecting. This has happenened so many times, it's disgusting.

Some questions
Better to wait for the direction or get in before the move starts ?
What size of stop is to be used for intraday and swing ?

Any insights into trading this will be highly appreciated.
Thanks.
 
when the price hits the support level, it doesn't mean the price will go up right away.
You have to wait for a confirmation signal.
Even if there is a confirmation signal, it doesn't mean it is a guaranteed
success.

similarly for resistance level.

Well. For trading, you have to accept such uncertainties.
 
Are the key support levels you trade, key support levels? Support should act as a support, which means that if your stock gets to that level your change of holding should be greater than 50%, otherwise it is not key level support. Besides the fact, everything can happen on a support/resistance level, you can do what Maxinger suggests or if you have the direction more right than wrong, just use different management styles around your stop and targets. Being 'right' about a trade and getting stopped out, is a stop management problem.
 
As above, s/r levels are only confirmed as s/r levels when price confirms them by moving through or rebounding from. Its rarely a high probability trade to buy something in the hope it will go up: higher probability comes from buying it when it is already going up: maybe set a buy order well ahead of price.

A classic TA-based way to locate a stop would be to set it somewhat below the s/r zone. you can consult ATR also to check that your stop is not located within the range of normal recent volatility.

In any event, check what the indices are doing. No point jumping onto a yacht when the tide's going out.
 
You will have to turn a lot of rocks before you find something worth a damn.

Eliminate what is not working.

You are probably trying to get a trade(entry& stop loss) based on lower timeframe and you are expecting a move to happen... This in general, atleast for myself, did not work. Market will usually chop until a signal on higher-timeframe appears which gives the needed momentum.
If on lower timeframes you will probably get your ass chopped and as you said, by the time the move happens you will have given up.

Markets are driven by human behavior and we are emotion-driven. You need to prioritize context/bigger picture.
If you trade without a context, you are punting trades just like everyone else.
 
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