[zeon]

Let me first say thank you for taking the time to reply to all my questions. I am definitely learning along the way. What you're saying about there being no noise in the markets is definitely making me think. For instance if price reverses, it usually does not do in mid-air. It's like the market is one big seemingly random chaos but once you find the key to decrypt that information everything becomes clear (or at least that's what we hope). But does this lead to believing that everything that happens in the markets happens for a reason? I particularly like your analogy to Star Trek, being a trekkie myself

	Quote:	DbPhoenix
	If you're going to have important S/R on the weekly at 1800, it's going to be there in every other timeframe as well. Other S/R levels will reveal themselves as one travels down through the timeframes, but he isn't required to trade every last one of them.

And that's where my problem lies. How do I identify important support or resistance levels intraday? I often have no problem identifying support on a higher timeframe, but these "zones" are too wide to trade of really. Like you show on your chart in the PDF files there are macro levels which are relatively easy to identify. But these zones are extremely wide when you plot these lines on an intraday chart.

I don't know about the NQ but on the ES for example I see zones as wide as 7 points that offer support. Often I see price reacting to these levels during the day, but sometimes it's on the upper boundary of the zone, other times it's on the lower boundary. But using stops that are wide enough to compensate (> 7 points, so around 10 points) on the ES isn't very useful when the market on a daily basis moves around 20 points. What happens to me a lot is that I take a long trade from support on decent volume, only to get taken out because price finds support 15 minutes later 3 points lower and then reverses.

Other times it looks as if I got the entry near-perfect on the lower boundary of a support zone, but price breaks support and immediately travels back into the range. A false break in a matter of speaking. When I look on a higher timeframe (30minutes or so) then I see a nice hammer-like formation forming. But on a 3 or 5-minute timeframe (which are the ones I use most of the time) this isn't visible, let alone on a 1-minute timeframe.

	Quote:	DbPhoenix
	I start with the macro, as I show on p 50 and following in the PVSR pdf I posted to my Blog. Then I work my way down to the more minor S&R levels. On my chart, I use lines of three different thicknesses, the thickest being reserved for major S/R that's lasted for weeks or even months, the next for S/R that's not quite so important, then the thinnest for what has been S/R only now and then and hasn't been terribly reliable but has also provided some excellent entry/exit signals (most often I find that what looks like minor S/R is actually something more major that I just overlooked; if I go ahead and plot the line, I'll notice other consistent levels over past days that just never registered with me). I also use three different colors for support, resistance, and the midpoint (what Wyckoff calls the equilibrium level [similar to what MP calls the POC]). This may seem to others like unnecessary busy-ness, but it helps me to see at a glance where I am while also avoiding a double-think at a time when I don't need to be doing that.

If you plot these three different kinds of S/R, don't you have lines drawn all over your chart? In some of your earlier posts on ET you had charts with "important" levels such as the previous day high, low and close... If I understand correctly you've changed your stand on some things you posted in the past. Does this include things like PDH? In my own trading, I used to draw lines around the PDH and PDL ànd use S/R from a higher time frame, say an hourly chart. Sometimes I'd get really nice trades off these levels from the previous day, but my frustration comes from not knowing what or how to do when I have a line drawn on say 1358 from the previous day but also two lines that identify support between 1345 and 1355 where important support is.

	Quote:	DbPhoenix
	And, yes, S/R is all over the place all the time. And a scalper is likely to be concerned about those minor levels because he wants a reliable entry that results in a quick profit. But I prefer to make one or two trades a day and ride them, so I wait for tests of the more important levels. If price never gets there, I don't trade that day.

You're hitting the nail on the head here. S/R is all over the place all the time, and that's exactly what's causing me a lot of frustration. No one knows when what level will be important. Price seems to "forget" about support too a lot of the time. I think I've come to understand the basics after studying charts for a couple of years, but despite some occasional success in my trading, I have yet to get consistent in my results.

	Quote:	DbPhoenix
	I haven't studied FX so I don't understand it particularly well, nor do I understand the people who trade it. Without any of that, I'm flying blind, and why bother? And not having volume doesn't make things any easier. But if someone else wants to give it a shot, what business is it of mine?

I'm not particulary interested in FX, but I do want to know what I can do to understand the people who are trading an instrument. What do you mean by that? Getting to know actual traders? Are people that trade the ES different than those who trade the NQ like yourself?

	Quote:	DbPhoenix
	The ES has always reminded me of an old lady. The NQ is something more of a hell-raiser. The YM is something of a new guy who's trying to become one of the cool kids, but they haven't reached the point of letting him sit at their table at lunch. The ER is something of a toddler who can't make it from one end of the room to the other without banging into everything along the way.

I don't know if I understand your analogy completely. With an old lady do you mean it moves slowly? Because when I look at charts, there seems to be a striking similarity between the ES and the YM a whole lot of the time. The NQ and Russell seem to follow a path of their own. Anyway, I've focused my efforts on the S&P, but I take it you see the market a trader picks irrelevant as the same principles would be valid amongst all markets, right?

	Quote:	DbPhoenix
	Yes, it would be. I didn't because I was tired. When I get tired, I tend to do stupid things. I don't have to make the maximum number of points every time I trade. The market's there every day.

Isn't that an emotional reaction to trading? You say the trade would be valid but you didn't take it because you were tired. I'm convinced you know what you are doing, but how does a trader know when to quit? Should he quit after the first winning trade? The next three days he might have all losing trades. If you can make it a winner the first trade of the day, than that's fine I guess. But most of us probably don't manage to do that.

Yet again, a long post and I hope you don't mind all these questions. It just looks as if there's a new door opening and I've found some new motivation at exactly the right time to continue my quest in becoming a better trader.