Chaostrader my friend.... Who are these "pros". Are they working for someone else or do they own their own business? Think about this question. What more can they possibly know than the average trader like you and me. What is their edge? Here is all you need to know about support and resistance... I am going to give you something that could help you become one of the "pros"....one who owns his own business and doesn't depend on others for his wealth. It is up to you what you do with it...look closely. Put up a long term chart of your favorite currency. Let's just use the EURUSD since we are in this thread. Plot 60M candles. We seem to be trading around 1.4296 now. On your chart plot these lines manually or better yet learn how to write some code to display them automatically. 1.4385 1.4350 1.4315 1.4285 1.4250 1.4215 1.3885 1.3915 1.3885 1.3850 Now look toward the left, study the chart very carefully and think about what you see. If you can back up a little and look from a distance it will help. On your chart you have support and resistance, supply and demand, entry and exit targets, stop losses, you have identified where the major option players are and you can see the effect they have, you have identified where the big funds are plowing in and out, you have mastered psycology of the markets for you see why the minutia is occuring. You see why the market overshoots. You have a complete methodology for wealth. All answers are here. Doesn't matter what market you trade, beans or euros. You don't need any indicators to help you. You know where value is located. Think of it as a battlefield and you are the warrior. You are trying to advance, sometimes the force is strong and you get pushed back, if you are trying to reach the next level then your next battle on the front line is 4315. You will very likely not succeed on the first try, you rarely do. Instead you will do battle between the new front and the recently overtaken level. You will keep getting pushed from 4315 to 4300 to 4285. using your individual strength to push through on the upside. It is a great enemy. It is the emotional minds of many. They will throw you around and beat you down. You will likely return to the previously taken front at 4285. You have lots of friends there to push you up and comfort you. If your friends at 4285 can't help you, they become your enemy and push you down to the big, ugly monsters down at 4250. These monsters are a formidable strength and they have lots of firepower. Not there own money mind you, but worldly money. Money that is of little use. The monsters on these stops will either rocket you back where you came from or you will be victorious attacking from above and slay the beast at 4250. So the battle goes and goes. Don't run out of ammunition and never think you are defeated, for if you do...well then you are! Master this and you will master your skill. DRT
More comfort for Realist and others shortys... Are there enough forces to push up? Hmmm, I am betting on the warrior to visit his many friends at 4200 So the battle goes and goes.
Position was stopped out this morning at 1.4265 basis ECZ7. A break at that level indicated a move over the prior swing high. For now the XEU looks set to move higher since the DX is breaking down under 77.70 which was prior support. I'm flat for now. This was the 1st time in several months that the XEU broke out over its primary swing high so there could be more upside coming here imo...
So brave warrior....you fought at 4315 and like so many times before, you returned to recently taken front at 4285. You were beaten badly and sent toward the monster, but agiain your friends have helped you. If you hold on here, you will likely return to try again at 4315 for you fight your battles bravely and oftern in the consolidation zone. If you do not hold on, then you will have to fight the monster at 4250 where he is always waiting for you. He likes to eat his prey before 10:00 in the morning EST. Funny how creatures are habitual just like humans. Good luck brave warrior.
Downrivertrader, I did what you showed me the other night. Unbelievable!! I watched the "battle" yesterday at 1.4285 and then even I was able to say "if it breaks this it is going to drop" and placed a sell stop on my demo account. I took a small profit and then watched it drop an hold at 1.4250. I then sold on strength twice when it went back to around 1.4267 and rode it down to around 1.4248 where I closed each position out. I certainly have much more to learn, but you have opened my eyes a great deal, and I thank you! Quick question about the lines you told me to draw. Are you saying the bigboys generally work at 15, 50, 85, and 00 or is that just the Euro?
Chaos. You are a good student and catching on very quickly. Here's another tidbit. Those sup/res lines. The ones that appear on the longer time frame plots will almost invariably appear on shorter time-frame plots as well, and these define the the more important (stronger) regions of support and resistance. The longer the time frame, the stronger the support or resistance. If you find regions of support and resistance on a relatively short time frame that do not appear on longer time-frame plots, these support and resistance levels will be of lessor importance and much more easily pierced. Thus, support and resistance on weekly charts is superior to support and resistance on daily charts which in turn is superior to support and resistance on 60 min charts and these are superior to support and resistance on 15 minutes charts, etc. Get in the habit of looking at your charts in several time-frames. Start on paper (demo/simulation account) graduate to small positions with real money and scale up as you progress and are profitable. Trade intelligently and with patience, not with emotion and impulsively. And perhaps the single most important thing for any beginner to grasp is that trading is not a path to quick riches. Slow and steady wins the race. Never under any circumstances put a large fraction of your trading account at risk on any one trade, no matter how confident you are. Use leverage wisely, always considering the worst case scenario. Good luck with your trading.
Piezoe, Thank you for the your advice. I feel so fortunate to have found this site. With my research , and individuals like yourself and Downrivertrader here to straighten me out I am as confident as I have ever been that I can learn how to trade the right way. So here is my attempt apply a little of what I've learned. I look at a monthly chart and a weekly chart and worked my way back. It seems like the Euro could go to 1.46. (Me trying to follow what I believe is a trend line) When I see the US economic data it is hard to imagine that this market is going to go down over the long term. So my thinking is up long term for the Euro. As far as tomorrow for me, this is even more of a guess. I am pretty confident based on what I' ve learned here that 1.4285 is support. If this Holds tomorrow based on a trend line I drew I come up with 1.4325 as the next point on that line. Absent of any major news I am leaning toward the market going up tomorrow. Am I way off base here, or am I in the ball park?
Chaos, The one thing I have learned over the years is NOT to complicate your trading with concerns over recognizing everything. Certainly there are other supply and demand levels in the market. Keep your trading simple and execute. Do not, I repeat, do not overcomplicate a very simple and robust method. Develop rules to deal with the levels I mentioned above. For instance, you will find that there are always willing buyers when price dips to 4280. Just under the 4285 level, but below here and it get much more risky to remain long. DRT
Here is a golden egg. Yours for the taking? or just a lot of hot air? If you must add other levels, (lets continue to use the EURO as our example), just plot the same lines on a EURO FX (Futures) chart. You will see why spot stops at some other levels. :eek: