Spectre2007
Registered: Dec 2006
Posts: 6296 |
10-27-12 02:14 PM
Bid - Ask spread
Support - Resistance (Range)
ATR
Support - Resistance (Range)
See how it works, the most minute support resistance is the current Bid-Ask Numbers..
You look at daily data and create price intervals of 20 points 40 point or another number ranges or ATR's, so when price moves into a certain range or ATR, basically position trades should be buying the bottom ATR and selling top of ATR.
So our current range is 1395-1415, even though you give up the spread on entry and exit (bid-ask) you can still 'market make' at ATR ranges.
so buy stops above the ATR, sell stops below the ATR, to capitalize on the price moving into another ATR, and buy and sell within the ATR.
if a scalper in the pit is hand signaling the current bid-ask, and floor broker hits his bid, the scalper immediately offers at the ask, and another floor broker takes his ask, thus he made the spread. If the bid is hit and price shifts down, and his bid turns into the current ask price, the scalper will immediately offer at the ask to get out at breakeven.
Thus if you sold within the ATR at the top your immediately trying to buy it at the bottom of the ATR, but if price breaks the top of the ATR, you immediately have to buy outside the ATR top range to get out or reverse.
The algos effectively created a ATR scalp range, selling and buy repeatedly at the borders within the ATR.
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