Number of times price hits resistance/support then breaks

Discussion in 'Technical Analysis' started by vingbel, Jun 8, 2009.

  1. vingbel

    vingbel

    From what I found, in my very simple number crunching, this seems to be true on average.
     
    #11     Jun 9, 2009
  2. 3-4 times total, so after a two touches, I watch momentum and volume closely for the 3rd and then 4th touches. Momentum and/or volume divergences (positive or negative) at or near s/r levels are what I pay the closest attention to. People can say this or that, but this is just my personal opinion, and the way that I trade s/r levels.

    Instance where a support level has a very high probability of holding: Price has bounced twice/three times off of level, and is approaching it again with the presence of either(or both), declining volume and/or positive momentum divergence. Short term ATR contracts as price draws near the level. Trade has a high prob of working out. Use a stop, period, period, period.

    Also keep in mind that an exact price level is not always a desirable level, as there's a ton of participants that don't mind s/r levels. I like an s/r zone, more than an exact price level.
     
    #12     Jun 9, 2009