|
Quote: |
|
 |
|
|
And of course the next question is - what levels do you use and why? Use them all and your chart will look like a mess of horizontal lines everywhere. If you put enough lines on your chart, some will look like they nailed the HOD or LOD. Some will just get in your way. |
|
|
|
|
Yup absolutely agree you can end up with lots of lines depending what you use. Just using highs and lows off an hourly can end up with lots. Picking the right lines can be a bit of an art. It's not hard exactly as with all things it needs experience (work)
Looking for 'clusters' is not a bad idea, these form if a price has been tested a lot.
|
Quote: |
|
|
|
|
And the follow up question: are static, fixed lines that are based on YESTERDAY'S price action good for determining TODAY'S price action? Food for thought. |
|
|
|
|
The answer to that is an un-qualified YES. Are they good for predicting todays action the answer would of course be NO. My favourite example the good old floor pivot, yesterdays H+L+C/3 is a simple but effective sentiment indicator. Price above bullish price below bearish. Simple.The 50% spot 'works' good too H+L/2. As does the
PoC. etc. etc. No predictive value but gives a clear and un ambiguous indication of "where you are".
As an aside. In the S&P, 70% of days, price will come within 2 ticks of the floor pivot. Heres the interesting thing the stats are very similar on an hourly chart or a 30 minute chart (using the previous bars 'pivot') this suggests to me there is some inherent usefulness in the number rather than being self fulfilling because everyone is watching.
Anyway sorry for drifting off topic but you did ask the question.
Personally I think using PA (be it candles bars or maybe
VSA) to determine what
is happening in areas where things
might happen (previous S/R, MP etc.) Is a fantastic way to trade.
Cheers.