Sounds great, now where is your stop and where do you take profits? How many cars you trading? Adding size? What's your w/l ratio and can you beat your benchmark over 10 years?
Support: Buy at support, with a sell stop a few units below support. Reistance: Sell at resistance, with a buy stop a few units above resistance. The idea is when it touches it, it either bounces off or blows through it in a definitive manner.
I'm new and trying to get into this. Do people actually make any money using this strategy? It seems like an idiot can do this... wondering how successful doing this is?
"It seems like an idiot can do this..." I think so. But you have to know where support and resistance are in the timeframe that you're trading.
The problem is, oftentimes price will blow through support or resistance and then once everyone is shaken out, it will bounce. I see this more often than not. Secondly, when you get a s&r break it can be a big one. You're better off identifying a trend and buying or selling into pullbacks.
Assuming you can identify some decent support/resistance lines - it's the ambiguity which would require additional rules. You'll want to add some sort of confirmation as well. If you leave your support on low volume, does that count or is it just about to turn around and head back to your stop. Using the resistance lines for targets seems a decent place to start. Many strategies use it. I'm new to a lot of this as well, so I've been reviewing a lot of them.
Thats not a system. Thats sorta like saying: Please comment on this simple brain surgery procedure. Cut here, cut there
Here is a link to an old Easy Language program by Dennis Tilley which attempts to mechanically define and test support/resistance: http://trader.online.pl/ELZ/t-s-Moving_Averages_with_Res_and_Supp.html I have not used this system, but it will allow you to test this approach with TradeStation.