Indicator to supplement S&R

Discussion in 'Technical Analysis' started by bigbrent701, May 7, 2007.

  1. My trading beliefs center around support and resistance and being able to identify the trend. What I like to do is look at the major support and resistance levels on a chart and mark them.

    What i have found is that with this method the real edge comes by sitting on the sidelines when the market is not near these zones. For example. If the YM has major support at 13100 and major resistance at 13200 the closer you get to the middle of the closer the trade is to being a coinflip. What i am looking to do is to create an indicator which color codes the background of a chart by relative edge relative to these key zones.

    The closer you are to the zones are your green zones because that is where your edge is the largest.
    Next which is slightly inside this would be your yellow zone which has a lower edge, and finally the inside is your red zone which has the most random results and the least edge.

    More of a way of staying discplined than a method itself I am curious if it is really even possible to program to plot these zones based on a given support or resistance level.

    If you are looking for a reversal then fading the green zone would be the best play. If you are looking for a breakout then using breakout rules accordingly.

    Again the main idea behind this is more a way of discplining your mind to avoid taking trade without an edge.

    I would like to expand my research on this indicator, anyone that is interested feel free to PM me, and of course any input is always appreciated.
  2. Top portion of chart is Price displayed in 2401 Volume Bar increments.
    Labels on Price are established for the next fastest chart increment (343 Volume Bar chart) these show the Trading oscillations within the Prime Trend

    Bottom portion of the chart is the Ergodic (Strength/Momentum Indicator) showing the Trend Oscillations.
    The color changes display a top or bottom being created in the Trend.
    If the color change occurs at or above the top black line that designates Prime Trending Resistance.
    If the color change occurs at or below the bottom black line that designates Prime Trending Support.

    Divergence exists as in other systems but here Divergence is only a warning signal because it is inconsistent. What is perfectly consistent is price oscillations creating Resistance and Support. Trends are perfect when read in a perfectly consistent environment.

    Buy ever Trading Oscillations HL or Trading Oscillation Match Low to challenge the last Previous Trading Oscillation HH. the established Trend gives us the "Reasonable Expectation" that the Trend will continue until it fails. One doesn't have to extract EVERY point the market has to offer just the simple easy to read trades to be wildly profitable.

    End of research . . . now go forth and prosper.
  3. ==============
    Good S&R points, & time plays an important factor also.

    Not just sell in May.....away''; but other ways also.

    And the timing this week may not be the best[very extended];
    but in an uptrending bull market, clearly disagree between 13100-13200 YM is a coinflip-Not in an uptrending bullmarket.
    Mainly because uptrends tend to make higher highs,higher lows, higher closes;
    flip that for bear markets, but not in that now, but looked like it,
    2-27.LOL[Lower lows, lower highs, lower closes]

    And if this was a downtrending bear market[it is not now] it still would not be 50/50 coinflip, practically,profit wise speaking .
    Also Markets are not coinflips .Hope this helps banking /flipping more coins from markets, to use your words.

    To repeat a pattern, good s&r points.

    Wisdom is profitable to direct. :cool:
  4. Simple base issue.

    Everyone sees what you see. What you mention is very basic.

    So think what you think as an edge doesn't exist. So...

    What makes you profitable? What is it that you do that is profitable?

    When you have a clear answer, you'll have a better idea of what indicator to use. From the information provided, that's all I'll say for now.

    (This is not a mental/perspective issue, but a technical one. Ones who stick to saying it's mental shows that they have no clarity towards their action... and lack of clarity = lack of self-control)
  5. While what everyone does see the same things I see they can interpret them differently. I do feel i know why my method works now I am looking for ways to improve. One of the ways to improve to avoid taking trades where my edge is taken away.

    More than advice I was really curious if what i mentioned above about color coding areas of a chart will a fill color is possible. I dont know very much about programming but I have access to people that do.
  6. airball



    thank you very much for the answer you gave. this is the part of the puzzle i was needing for confirmation on trades around S/R.

  7. Glad I could help. Let me know if you have any other questions.