There are however some lines that seem to hold some significance and either slow down price or reverses off it. Prior Day High/Low/Close/50%. Possibly the pivot point. You could also plot the daily Open and the rolling 50% level of the day. It could help as some kind of guidance in combination with reading price. The prior day Close (16:00) is actually quite frequently traded and often a reversal. In fact, price reversed of that level to the tick (ES) yesterday. Not sure if this is what people consider S/R though.
Sure is. So, random after all...? However, most days aren't outside days, so you're left with either the high/low of the prior day. The Close should always be watched though. It is statistically significant.
Please tell me you are kidding. Are you saying that based on the lines you have drawn you can predict the next coin flip??
Support and resistance lines seldom work because folks dont know how to analyze with indicators. These lines fall into the category of scribbles.
Support and Resistance Analysis is an analysis...not a trade signal. Analysis + Trade Signal ----> Trade I remember someone recently here at the forum asked someone else what's their trade signal that tells them when to enter the trade ? The guy reply back via saying "trend analysis". Trend Analysis is an analysis...not a trade signal. In addition, there are dozens and dozens of different ways to compute s/r levels. I've seen at least 20 different ways here at ET alone that has been shared. There was one thread were someone ask members to post their charts with s/r levels... Most charts of the same trading instruments had different s/r levels. This is why so many say s/r analysis is subjective because of so many different ways to compute or estimate the levels. Some even conclude its a coin flip and rightfully so until the below occurs. Therefore, I think its best to just concentrate on the type of trade signals being used with s/r analysis because you can backtest the performance of the trade signal with different types of s/r analysis...not so easy to do with s/r levels considering they are just a type of analysis. Simply, there should be a discussion about how the s/r analysis was being computed and then a discussion about the specific trade signal being used with the analysis prior to being able to find answers. P.S. For anyone that didn't notice, there's a few different ways of computing s/r levels mentioned in this thread that would produce different levels (lines) in comparison to someone else using other types of ways to compute s/r levels.
Crazy backtesting stats you have there. MA seems to be a large part of your decision making. Have you tried removing it when backtesting? How much did the results diff with and without? One more question: Trading off 60 mins and looking for entries on lower time frame like 5/1m. Should lower time frames be on the correct side of MA as well? Since I often identify locations on hourly (now added this MA on hourlyfor decision/filtering).