good info on that tick indicator I will definitly explore that more I begin trading at around 12:30 or so when I get home from school. By then, I can find some intraday support and resistance levels, whether it be a trendline or normal congestion. I then wait till it aproaches say a support level, and then I short it. however, sometimes, it breaks right through the level. I was wondering if there was a way to determine how likely a support/resistance level is to be violated.
SM37 This is the statement I want to understand your meaning - "I guess the one catch with a system like this is that your profit must be enought to offset the opposite trade" Also, imo there is no definitive way to determine if a support or resistance level will hold unless you are a complete master of market delta "realtime" www.marketdelta.com
what I meant was, there could be situations where, say, your short gets hit then rallies, hits the long, and then procedes to fade. I guess this is an unlikely situation and I assume if you do better calculations of where to place your orders it becomes even more unlikely
Correct, and not an unlikely situation at all. Unless the probabilities for success in either a breakout or reversal are on the trader's side, then the trader can easily end up with as many stopouts as successful trades. Therefore, he has to be accurate with regard to the S/R levels he chooses in the first place.
Yes ok I understand what you are saying now - sorry about my confusion. This is the part of the "bracket" mechanics that I was able to crack for market opening trades. For a s/r level trade, you would have to spend some time to determine the spacing of the long and short entries (from the s/r level) and the amount of position sizing to use to hit the typical profit amount you need per trade. I do know others that trade this way for various other levels; Current days HOD (on a return to this level) Current days LOD (on a return to this level) Daily floor trader pivots (weak imo) Market profile/Market Delta levels (these can be very good areas) If you really focus on how to make this work and open up your mind, you will find a very good way to make this work for you so you can stop the "guessing game".
You're looking for the wrong things. Start with "did" not "will". "Did" support hold? "Did" resistance exert itself? Work from there.
I have a mechanical way to handle any chop moves within my brackets prior to a breakout of price - but this took three months to crack. It can be done - but the key for simplicity in trades is to have what I call price "reaction" areas. Lamont is right that you need to have good s/r levels that have highly "reactive" price levels to increase the probability of very simple quick and out trades. Why sit in trades for 30 to 60 minutes, when you can find areas that give quick reactions to have 2 to 10 minute trades.
SM37 - I will be doing some backtesting of my opening market bracket trades for the YM this weekend. I have never traded the YM but if I find anything interesting I will try and give you some hints.
Which is what S/R is all about. And which is what so many people miss. Yes, one can plot S/R in advance, and should. But then he has to pay close attention to what happens there when price approaches, crosses, recoils. If nothing happens, then it's not S/R. If something does, what? where? for how long? over what range? Does it blow through and never look back (in which case, you got it right)? Or does it slip into an immediate congestive battle (in which case, you almost got it right, and in which case the probabilities plummet back toward 50:50, or worse)? There's more to S/R than just calculating Fib or drawing a trendline or finding the high of the day. If it isn't a zone of activity, it's not S/R.