support/resistance in YM

S

sportmatt37

Hello all. I've recently started trading the YM on an intraday basis. I've been using a small position size (1 contract) to limit my losses while trying to get a feel for the way the index trades. Right now I am mildly profitable.

The main strategy I have been employing has been trying to go countertrend at support/resistance to try and grab a few points. However, on many occasions, the contract flies right through my selected resistance area and procedes to form a breakout. Other times, it works corectly and falls a bit before either making another run at the level or turnign into a full-out reversal.

My question is, are there any clues to when a contract might break through the resistance or when it might be stopped? Anything would be apreciated, whter level 2s or T&S or some technical indicators. I just want to be able to figure out if, on a given trade, there is a relativly low probablity of the index violating the support/resistance level. Thanks for your help

(oh and also, if you have any other random tips for trading the YM, feel free to post :D)
thanks again
 
Quote from sportmatt37:

Hello all. I've recently started trading the YM on an intraday basis. I've been using a small position size (1 contract) to limit my losses while trying to get a feel for the way the index trades. Right now I am mildly profitable.

The main strategy I have been employing has been trying to go countertrend at support/resistance to try and grab a few points. However, on many occasions, the contract flies right through my selected resistance area and procedes to form a breakout. Other times, it works corectly and falls a bit before either making another run at the level or turnign into a full-out reversal.

My question is, are there any clues to when a contract might break through the resistance or when it might be stopped? Anything would be apreciated, whter level 2s or T&S or some technical indicators. I just want to be able to figure out if, on a given trade, there is a relativly low probablity of the index violating the support/resistance level. Thanks for your help

(oh and also, if you have any other random tips for trading the YM, feel free to post :D)
thanks again
More...
Yeah, don' hold back on them tips.
:D
 
Yea, this 'sensible' guy (if you noticed) keeps scouring the threads for newbies/new posters and injects them with lots of 'sense'. Sheesh :D

Cariocas

Quote from 5Pillars:

Wow what a rough crowd - LOL! :D
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Quote from sportmatt37:

However, on many occasions,

Other times,

My question is, are there any clues to when a contract might break through the resistance or when it might be stopped?
More...

"Many occasions" and "other times" aren't going to be of much help. Perhaps your S/R levels aren't what you think they are or expect them to be. Suggest you post a chart which illustrates the problem you see.
 
Quote from Lamont_C:

"Many occasions" and "other times" aren't going to be of much help. Perhaps your S/R levels aren't what you think they are or expect them to be. Suggest you post a chart which illustrates the problem you see.
More...

thanks will do

EDIT: My IB is taking forever to start up but when it finally loads i will post the charts
 
SM37 - I have a fix/concept for you that you can use to develop a trading method for the s/r levels you are trading.


When price gets to your s/r level that you have determined then place a bracket trade "around" the level. Have a set of entry orders above the s/r level for long entries, and an equal size set of orders below the s/r level for short entries.

If price bounces at your s/r level to the long side you will be "stopped" into your long position trade (the trade you are currently trying to accomplish). If price blasts on through the s/r level (the price action that kills your "bounce" play) then you will be "stopped" into a short trade position.

I trade "brackets" this way at market opens for various products with great success.

http://www.elitetrader.com/vb/showthread.php?s=&threadid=69979

Now you just have to do some of your own homework to "fit" a strategy from this information to make a successful trade plan that works for your comfort level. If you build a "mechanical" entry/exit method to trade your s/r levels then you can remove the need to guess what price is going to do at your determined s/r levels - NO ONE has any indicator or method that will tell you with any accuracy what the YM will do at s/r! :)

If you dig a little and do some backtesting of ideas, you can come up with a safe method to "cage" these YM s/r levels without having to guess what price action will do.
 
Quote from 5Pillars:

SM37 - I have a fix/concept for you that you can use to develop a trading method for the s/r levels you are trading.


When price gets to your s/r level that you have determined then place a bracket trade "around" the level. Have a set of entry orders above the s/r level for long entries, and an equal size set of orders below the s/r level for short entries.

If price bounces at your s/r level to the long side you will be "stopped" into your long position trade (the trade you are currently trying to accomplish). If price blasts on through the s/r level (the price action that kills your "bounce" play) then you will be "stopped" into a short trade position.

I trade "brackets" this way at market opens for various products with great success.

http://www.elitetrader.com/vb/showthread.php?s=&threadid=69979

Now you just have to do some of your own homework to "fit" a strategy from this information to make a successful trade plan that works for your comfort level. If you build a "mechanical" entry/exit method to trade your s/r levels then you can remove the need to guess what price is going to do at your determined s/r levels - NO ONE has any indicator or method that will tell you with any accuracy what the YM will do at s/r! :)

If you dig a little and do some backtesting of ideas, you can come up with a safe method to "cage" these YM s/r levels without having to guess what price action will do.
More...

wow great insight i will definitly explore this more. I guess the one catch with a system like this is that your profit must be enought to offset the opposite trade - but if you chose the right levels it shouldnt be too dificult
 
SportMatt,

If you prefer fading trades, you may want to look at TICK fades. This sometimes occurs when the TICK trades at or above +1000 or -1000.

This works best when the market is near some support or resistance point such as yesterday's high or low or near the boundary of a consolidation area.

Looking at the attached chart, Fades 1 and 2 worked well as the market bounced off the previous day's high. Fade 3 gave a few points profit while bouncing off the bottom of the lunchtime consolidation range. Fade 4 did not work at all, and as you can see it occured in the middle of that same lunchtime consolidation range. Fade 5 worked well as it occured at the close of the bond market and at the bottom of a consolidation range that was created during the morning action.

Watch these for a while and see if this helps with your fading strategy.

Charles
 

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