Is there a rule of thumb for this?

Discussion in 'Trading' started by Ansare, Jul 31, 2008.

  1. Ansare

    Ansare

    If there is, I've missed and would appreciate any input.

    Is there an accepted/expected number of times price can smack up against major resistance (or, of course, bounce off major support before you "know" it won't break through?

    Thanks,

    Ansare
     
  2. yes two times
     
  3. Ansare

    Ansare

    Yeah, ok, I may have deserved that.

    But.

    There has to be some order to this issue, no? Have to believe studies have been done?
     
  4. actually if the number of times price hits against resistance increases the probability it will break through increases too, mainly because the majority of people start thinking like you and assume; well if it can't break resistance then let's short
     
  5. nkhoi

    nkhoi Moderator

    four times.
     
  6. It truly all depends on the price action that led up to it. You gauge that and you'll be able to see if it will hold or if price will break through.

     
  7. Ansare

    Ansare

    OK, now I'm a bit stumped. Is it appropriate for a mod to be a smart-ass or u serious????

    :D
     
  8. Lucrum

    Lucrum

    I've probably seen rules of thumb for this over the years. Based on MY experience though I wouldn't put the word "know" (as in the outcome) next to any of them.
     
  9. dicul

    dicul

    There's this saying that some might find applicable to the OPs question where as others will just be left scratching their heads about the logic behind it:

    "What happens once, never happens again. What happens twice, happens three times."

    my first et posting! please be gentle...:cool:
     
  10. Before the Dow went above 1000 for keeps, the Value Line bumped up against the same daily resistance on 22 days before breaking out.
     
    #10     Aug 1, 2008