Adding in a trade can be done when the new stop/get out area, which is outside the noise, conforms to the risk parameters that you have set for yourself and your account. If the addition of size violates those parameters, then you cannot add. Clearly though , there are many times when the first attempt to break is false and you are stopped out. Then when it finally does go through, you wish you had larger size on.
People forget that there are thousands of financial instruments out there and all of them have major support & resistance levels and a lot of them could be traded TODAY!
One thing to note is that sideways markets would be very frustrating. The way to combat that is to use the indicators along with the S/R.--I like the combo of the two as it gets me in early and also allows me to add at the break of S/R. --Best of both worlds. You can trade sideways and trend.
Romik Good job. I have done extensive work using trading bots and I fully support your point here. A system that trades liquid instruments, based on either daily/weekly or even monthly TA analysis, clearly outperforms a system that trades signals generated by tick data aggregation or any other short term aggregation. In my opinion, the reason for this is the huge cost of slippage/comms. In weekly charts signals, the cost of entry and exit are almost irrelevant, while in short time frames slippage becomes a heavy burden. That's why a good TA system might end up under water when actively traded intraday while showing a good track record in wider time frames. The problem with this relaxed approach is the overnight risks endured and the complexity of managing many different instruments at the same time.
thank you, I have referenced 1000s FIs as a possibility to be busy every day if one suffers from 'itchy fingers'. Otherwise, sticking to 24hr electronically traded futures can be enough to keep 1 trader busy. Easy to code automation is also a benefit
Hey Romik, can you elaborate as to how you determined S&R? Do you use Fibo as well? do you take into considerations volume per price? Do you "rate" the S&R lines in any way?
Pure price bar evaluation, no retracements, pitchforks, MPs. Very basic support/resistance levels based on visual recognition. http://stockcharts.com/education/ChartAnalysis/supportResistance.html
Another failure break. I must add that for short term traders shorting every time there was a break of 1.3126 has been profitable 100% so far.
Yet again there was a small profit opportunity for short term traders, will 1.3126 hold or is this the time when it caves in? Holding short.