R/S Trading Question

Discussion in 'Trading' started by Flashboy, Feb 10, 2004.

  1. I'm trying to incorporate resistance/support levels more in my trading..

    today's action at 11:00 est.. The ES shows res. at 1143.50 - 1144.00 area.. this is yesterday's high as well as today's R1 level..
    also, the NQ at the same time is at its Prev. Days high.. and a point above its R1 level

    when the market reached this level a few minutes ago.. it is now 11:05 est.. I wanted to short at that level but was a little afraid to..

    Would you enter your short ahead of time at the 1143.00 area as a limit order knowing this is resistance and once you're in the trade then determine how price is reacting as to whether or not to hold the position for more gains..

    or Would you wait for price confirmation first?

    I always have trouble shorting into a sharply rising market like this morning.. but am trying to gather the confidence.. as it stands now had I entered a trade I would be ahead maybe a point..

    Appreciate any help and good trading to all..

  2. I passed on that short in the NQ b/c of the high volume bar at 10:43.
    The congestion from 10:44 - 10:53 showed me strength.

    Thats the way I was seeing it, at the time.
  3. Magna

    Magna Administrator

    Flashboy, that's the eternal dilemma, do you go for a better entry price (with slightly higher risk) or do you wait for confirmation (with a slightly worse entry price). All depends on your risk/reward numbers and temperament.
  4. I should also mention that my R1 # for NQ is 1502. With YDH at 04.5, it puts my two lines at a disadvantage.

    The highs, lows, reaction points, need to be within 3 ticks of a floor pivot # to give me confidence to take a poss. at that level.

    Also coming into today, I thought it unlikely to test yesterdays hi.

    So I was off from the getgo.
  5. They


    Check out the software and screen shot link below. It might be the confirmation tool you are looking for.


    They have a 14 day free trial
    • md.gif
      File size:
      41.4 KB
  6. They


    Visual of entrance confirmation
  7. dbphoenix


    Suggest you look at trading divergences at S/R. There are all sorts of indicators you could experiment with, or you could use just volume. You'll have to decide how much risk you want to assume at the POE, but it will be far less than you might think.

    The 1255 entry today on the NQ is a good example.
  8. This is why I feel its a good idea to look more into this.. the risk/reward is much better than when you wait for price confirmation like I've done in the past..

    I see the 12:55 Divergence at Res. you're referring to.. good point.. I'll pay more attention to divergences at those levels..

    Even though there was no divergence at 11:00.. it could have been taken for a small profit..
  9. Banjo


    Traders have their own developed styles, tools, etc to accomplish their information objectives. It's always good to know where you are in the larger reality. When daytrading I use a 180 min chart for general reference info. Pull one up for NQ going back to Jan. What are the odds of NQ getting thru 1505-06 level on low volume days like today and yest. Once you see this use shorter time frame tools for entry, virtually any of them will work.