TA becomes self defeating??

Quote from dbphoenix:

More than that, if they don't coincide with price S/R, they likely won't hold. i.e., they'll be irrelevant.
--Db
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The fallacy of this statement lies in the presumption that S/R is something derived on its own. It is not.

S/R is determined by price reversal. When price pulls back from a rally into new territory, the new high is considered resistance. When price sells off and runs into the 200 sma, it's support. When the 62% FR is reached, there will be resistance.

S/R is dynamic, not static. Again, if price rallies to the 50 sma, and pulls back, R=50sma. If price then pulls back to the 20 sma and reverses, S=20sma. Now I ask you, did the 50 sma "coincide" with Resistance, or was it Resitance? Did the 20 sma "coincide" with Support, or was it Support? In both questions, the answer is the latter.

Sometimes an ma is S/R, sometimes a trendline, sometimes a previous extreme, sometimes the open or close, or a gap, and yes... amazing as it may seem... sometimes it is a fib retracement number, including 62%.

It is not a matter of which came first, the chicken or the egg?
 
Quote from Fluidity:



Actually by 'map' I wasn't referring to Magee -- been years since I have read that book...

I like the way you use the term 'territory' :cool: I too focus on price and volume as my only 'indictor', but draw 'maps' using S/R, Fib Levels, MA's, Balance Points, etc to get a feel for the 'terrain' I am working with...
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You may want to look at the reissue, Winning the Mental Game on Wall Street. He goes into considerable detail on the whole maps/territory subject (not my invention). That along with Fooled by Randomness make a nice duo.

You're not alone in using Fib, MAs and so on, of course. But to me, they're just clutter. As I said, there's no evidence other than empirical that they provide support or resistance, and whenever they seem to, there is almost invariably previous price S/R to account for it.

But hey, whatever works :p

--Db
 
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