I have to agree with this 100%. Side note; position size and knowing when to exit a trade are a lot more important than knowing when to enter a trade.
I identify them by price action generally. More specifically, I look for long price action entries in uptrends and short ones in downtrends, choosing my entry right after small retracements in bigger trends. (That's only one way of doing it, naturally, and not the only way, but it's a pretty reliable one.) I don't really use "tools" other than in the sense that all charting is a kind of "tool" by definition. By backtesting and then forward testing the very few methods that convincingly pass the backtest without significant drawdowns along the way. In other words, "objectively". Even though both backtesting and forward testing are less than 100% reliable. One does one's best to approximate "reliability" and "robustness". The methods that appear to have a sound underlying basis (e.g. of the kind described above) and that show profits without serious drawdowns, first on backtests and then subsequently on forward tests, are the ones that almost certainly have a genuine edge. Nothing else is likely to have a genuine edge at all. Personally I don't let it get any more complicated than that, and I look for near-certainty rather than for certainty. Once you've got as close as you realistically can to proving that it has an edge, and working out appropriate risk-management and trade management parameters for it (this requires some mathematical/statistical understanding which needs to be learned first), then "doing it" is trivially easy and even boring. It's "learning how to do it" that's difficult, time-consuming and demanding of acquired skills that none of us was born with. The mistake many people make, in my opinion, is starting to trade whatever-it-is without doing all those other things first, just on "hope" or - even worse - on "ill-informed belief" (and often without really having learned the skills to do them). And the realities of the market predicate that that's never going to work well in the long run, even if one gets lucky briefly.
Good points. Support + resistance are somewhat like a 3 rail fence, or speed bump. While NOT 100% accurate, this IS still good ; uptrending bullmarkets have no resistance, downtrending bear markets have no support. Like the song says''WE ARE Destined to win ''[Jessy Dixon @ BBC, London,UK].
Through trail and error I have been getting better and better at spotting price levels. I use price action with confirmation from the DOM to make sure that I am not the only one watching these levels. They are not exact to the tick obviously but pretty key areas. How do you go about adjusting levels when there is a contract rollover? Will levels from the previous contract be respected once all the volume switches over? Or is back adjusting something that's required? Yes ill be back testing this myself but I want to hear others opinion and way of dealing with contract roll over. Im not sure how I over looked this detail before.