I am curious to hear about different approaches for identifying key price levels in the markets that you trade. The obvious one I guess are swing highs and swing lows from higher time frames. Also previous day's high and low. I guess the close too if there is an over night gap. What are other methods and tools that you use to determine key levels? How do you determine which ones are significant and which ones are not?
Well, the first rule of trading is...you don't really know where those (support/resistance) levels are -- your mind has to be open and calculating and recalculating in real-time, You can debate methodologies and viewpoints till the end of time -- but there is no really endgame to it; the only thing that matters is how you tally up at the end of the trading day's shit storm,
Is candlesticker.com still around? I remember that being a good resource to start identifying important prices. Generally, I consider a lot of price action to be significant too, particularly if it happens at a price relevant to the candlestick. Option strikes are significant, imo, where there is a lot of volume and open interest atm or otm. (I think someone posted here recently an article that explained how market maker hedging their short options made prices tend toward these strikes...marketsurfer, maybe?) Then just certain round prices (i.e. Those ending in .25, .50, even dollars, the 2.5s, the 5s), but percentage of price plays into these, if that makes sense. For example, the even .50s and dollars are relevant to F; while 2.5s, 5s, and 10s would be for FB. A good example of all of the above right now is FB at 150. Take a look at the last couple pages of the FB thread where we were discussing this on Friday. I suspect we'll see AAPL change hands a lot and stall as it passes through 150. Edit: Actually, the entire reason I started the FB thread was because of the move above 150 while it was establishing support. Last Friday's (4/28) chart is textbook...
I use weekly, daily and 60 minute trend lines that I make to trade one to five minute bars, some like Market Profile, Gann lines, others use Fibonacci or host of less frequent used dealing with Time and planet alignments. And you be honest, all of it can work and all can fail. If you concentrate most of time on risk and back test all ideas very well and have Trading Plan before using money, you have better shot than most.
keep an eye on these levels and soon enough you will learn how things work! https://www.barchart.com/futures/quotes/ZBM17/cheat-sheet http://www.stockconsultant.com/consultnow/basicplus.cgi
Ratio of ticks with short term moving mean. There is always a mean reversion for the normalized ticks.
Ye I re-draw them during the session and add extra lines. By the end of the day my chart has lines all over it. Just trying to get ideas on how to clean it up and make more sense of what is actually significant and what is not.