It’s very popular approach to trade from levels of support and resistance. But how to identify Usually when people trade or invest, they observe price action and based on some patterns they make decisions about opening and closing positions. But how often we can distinguish correct support and resistance levels from the market noise. There is no secret that about 70-90% of all trades on the S&P futures and other liquid markets made by bots. And most of them using intraday strategy with short period of holding position. So we will have waves on the markets, because they usually often have similar algo rulles for trading. They open and fix positions using some particular conditions. Using soft which is able to show horizontal accumulation, we can see such places, which might be levels of support and resistance, opening and/or fixing positions and you can use them in making decisions and trading. Let’s check 1 min chart on ES. I marked situation with bigger volume accumulation, because it was pit session opening we can suggest that it was opening positions. The first fixing was on the price 3214, and we see much bigger volume there in comparison with the average volumes in the clusters. 2971 vs 1000. Price reversed. The same situation with 1 hour time frame. There were accumulated big volumes on the price 3218. A lot of short terms traders/bots opened there positions expecting growing/failing. But when price grew there were no new buyers, they not defended their positions. Because the volumes less in 3 time on the price 3222 vs 3218. If you trade daily time frame, it might be absolutely the same situation. This is the way how it works, and how you can develop your skills and increase your trading results using volume analysis. You don’t need to draw any lines, just by identification of volumes accumulations you can find good levels of support and resistance on S&P or any other instruments.
decades ago, I drew thousands of support and resistance lines, because professional talkers and writers talked about that. I found that those were actually useless lines. I had deleted those lines years ago. just focus on charts with no S R lines, no indicators but just candlesticks.
It depends on point of thinking. I absolutely agree that every level of support and resistance will be break in future, markets conditions always change. Look at this points from the side of probability. There are levels from which price reverse. There might be a lot of reasons: defending of options positions, entering another players on the market, places which attract for opening positions. If you have good experience you you can see such places. So there are 4 questions: 1) Do the other traders see the same places (levels) as me or this is my imagination(expectation)? The answer in case you see that on these levels price make stop and we have some balance or times price behaviors in this range, or we see decreasing of volatility, so we can say YES, we found level. In case price move as usual perhaps our decision was wrong. Next question is: 2) how often we can notice such levels, in all cases, in half cases, part of them? So we go to the probability area. The better skills we have the higher probability of defining such levels. 3) what is the probability of breaking this level or reversing from it. To much calculation of probability for our brain for making decision. Our brain doesn't work in field of probability. We should have only YES or NO. We saw that 2 times price rebounded from some level, which probability do we have to do the same on the 3-rd time? On the 4-ths? In this case we can operate more effective when we use probability against sureness. the last question 4) Do we have opportunities to see such levels: could we see other participant interest (like open Interest, volume accumulations, hiddens trades, iceberg orders, huge real orders est) or we just pay attention on the price action? using some soft we can see it and it could increase our making dessisions. Even using candlestick chart and price volatility we can recognize some patterns (it's more difficult but it might be) when price "ready" to break the some level or "not ready". But it need bigger experience and it's much difficult. Using some special soft which show you additional useful information (instead of big range of similar indicators) might increase your understanding of the price behavior. I guess using candle stick chart it's "old school" like using paper maps instead of navigators which in real time mode show you traffic jam. It works, but if we have better choice why don't use it?
Support/resistance/pivots are definitely not useless.. YOUR support/resistance and pivots are useless lol
D Depends on time frame which you trade. Minute time frame ES. I started in the US morning at 9:00 am approximately. Let's check this day till end: 16 rebounds and 9 breaks. 64% of probability (app 2 to 1 edge) for opening from this level.
But that’s the thing, just because a sup/res band “breaks” or is breached doesn’t mean it’s “useless”, it’s all about context and how you apply it to your methodology
Sure, if you have opinion/signal and you can see some levels you can use them. E.g. put SL or TP near the levels, or open position after confirmation.