without looking at anything else, if one traded with just support and resistance, what goes wrong? trading ES or YM support/resistance calculated based on both daily and 5min charts. no fibbonachi/elliot/fundamentals.. thoughts?
Regardless of whatever "strategy" you use, you'll have to develop risk control guidelines to prevent small losses from becoming big losses. Sometimes your arbitrarily determined support level will hold, sometimes it won't. If it doesn't, you don't want to get destroyed on one trade.
I think the most common problems I see by traders that trade s/r levels as their main methodology is the following: * Poor Trade Management * No confirmation signal that the ES or YM has found some support or some resistance when particular price levels are reached Mark
you could trade s/r lines, channels just drawn from charts and you could do very well ,just don,t trade the middle
thanks everyone for the reply! Mark, Just to make sure, I know what you're saying. Trade management is about when to stop loss or take profits. If so, one would stop out a little below support and take profit at resistance or a bit below. For confirmation, I assume you mean MACD, stochastic, rsi etc., If so, is this not (indirectly) factored in the s/r calc? thanks TT