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I read somewhere that VSA is a big tent. I like that. It is clear that most of the traders on this thread do not do things exactly the same. And if you include DB (not a VSA trader per se, but a Wyckoff trader/supply/demand trader using PV) this becomes even more evident. That is, DB is doing incredible work far beyond most. It is elegant, simple and effective.
As far as drawing support and resistance in real time, there are many ways to do it. After reading the first thread and posts by Nihabashi, I prefer to look at WRBs and Long & Shadows now. There are many things I can't say about them and far more things that I do not know as yet. But what I can say is this. Those that use candles can easily see a WRB appear. The definition is simply A WRB is body (open to close) that is larger than the prior three intervals. A Long Shadow (upper) would be an upper shadow that is larger than the prior three long shadows (only). And the opposite would be true for a Long Shadow (lower).
Now, there are various was to determine what makes one WRB more significant than any other one. Two of the main things I look at is size and volume. Hence, in real time if there is a WRB that happens to have high to ultra high volume or is larger than the last three WRBs it is significant. The three prior WRBs is flexible, but once one decides on a criteria, one should stick with it. It may be different for the individual instruments traded. Subsequent price action will tell you that.
So one can easily determine what is a significant WRB, or Long Shadow. As far as trading it, it is always best to let the market prove it. Why go short simply because price is rising towards a supply/resistance area? Many "pivot" traders make this mistake. Just because price is moving towards R1, doesn't mean go short. Price can continue doing what it is doing: going up. However, one can become more attuned to price action as price approaches R1.
Take a look at the chart below. These areas were easily plotted after the appearance of the WRB or Long Shadow. As so many seem to not want after the fact learning experiences, I will say nothing about a trade set up. It is labeled and if asked I will give my $0.02
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I think there might be several ways of defining S/R but there is only one place where 'true' S/R resides, and that's the price level/zone/area where most of the action took place. For me, this usually means a congestion area of some kind, although it's not always that visible.
I used to think S/R can be found in calculated pivot points or levels from the previous day, like the high and the low. Basically I spent a whole lot of time studying charts and noticed some peculiar reactions to those price levels. But perhaps they were only coincidential? I have also observed price bouncing off a trendline, but dbphoenix' point of view I believe is that trendlines don't provide S/R.
Yours is apparently yet another way of viewing this concept. I'm sure a lot of traders will say "whatever works for you". But why would a WRB be any more significant than a not so wide body? Forgive me for saying, but when I see WRB and price is rapidly falling or rising, its my impression that there is a LACK of S/R in that area. Price seems to move from one area to another and these areas in between where price plunges or skyrockets don't provide any S/R for the reason that there's nothing but "air" in between.
This is my view, don't shoot me now please
I'm just stating my opinion and although I thought I had a good feeling in trading (based on my results last year), since this bear market started I'm kinda lost... so perhaps I got it wrong after all. Comments appreciated!
PS: Oh and sorry if all of this is off-topic, but I'm just replying to another post. Seems like a whole lot is off-topic so perhaps we need to (a) change the name of the topic or (b) start a new thread?