Yes people like breakouts, but they are harder to trade than they look. *Often times the "break out" is nothing more than a small retracement of the up/ or down trend before heading higher or lower. * A study of fibs will help traders see this, in my opinion. * Once the trade is taken, how does the trader now when to sell? Like I said above, these can be nothing more than a dead bounce, or a strong trend change..almost impossible to know before hand. Here is an example of jpm on a daily...was this a break-out?..at the time it looked like one, but it soon reversed and made higher highs. Like I said before s/r is very subjective, and someone that trades fibs, would probably not short here, as it was a support on the 38.2% fib level. This is another reason why trading "price action only" is very hard for most traders. One must look at the market from different angles.
Jack, why should anyone feel differently from you 5 years from now, when your last 5 years have been an unbroken string of meandering folly? Unless you now plan (as requested by many different ET folks) to publish audited returns from your encyclopedic ET claptrap...
Thanks for your kind words, and most of all for the posts; wow, a lot to digest. Looking forward to internalizing everything until it's second nature. The main thing I had to learn this year was patience (when to hold or wait) and how to avoid fighting the tape. Still working on it.
and the latest ET newbie falls into the Black Hole that is HersheySpeak don't they ever see what happened to the LAST newbies who were sucked in?
Actually, I think the issue most have is that he tends to write in 2nd (3rd?) derivatives. Other than that, I don't see that what he is saying is that different from what others have written elsewhere. But it's like looking through the lens - and lenses can be in microscopes or binoculars. Depends on what you are looking for.
JPM had all the wrappings of a decent breakout there, but since it was to the downside in a strong up trending market and there was no real fundamental news to drive the stock price into a tailspin, chances of failure were higher than usual. JPM has looked really weak vs. the market lately. P.S. - You guys who keep posting useless comments about Jack Hershey, why??? Do you search out every post he makes and then post crap from your special collection? I see the same comments any time he posts. Nothing he posts is misleading. If you don't like his technical style, or his writing style, or whatever, please just place him on Ignore, and stop cluttering up everyone's threads.
I posted this thread and am not sure if I have had an answer. It seems every body is having a go at this guy called Jacek Hershey. Any ideas on some non subjective method of deciding when a S or R has failed?
In your time frame, place a 20-period moving average. If the 20 MA is rising, price should find support at or near it and make a higher high; if it's falling price should find resistance against it and make a lower low. It's not a perfect science, but it gives you solid zones to work with, and survivable stops. Once 3 legs of a trend have transpired in your time frame, be on the alert for a possible reversal, or at least a deeper than average pullback. I use this a lot to guide my entries and exits. I joke with my trading roomies that when price has pulled 1 cm from the 20 MA on my charts, it will reverse back to the 20 MA. This happens so often that it's usually good for a scalp at the very least.
Spare me the stupidity, you have zero credibility. The only documented trading you ever did shows nothing but losses, go preach your shit somewhere else you insane sob.