Traders Laboratory - View Single Post - The Nature of Support and Resistance
View Single Post
  #6 (permalink)  
Old 05-21-2008, 09:03 AM
DbPhoenix's Avatar
DbPhoenix DbPhoenix is offline
DbPhoenix is The Ring-Bearer

Trader Specs
 
Join Date: Feb 2008
Location: USA
Posts: 841
Thanks: 114
Thanked 917 Times in 302 Posts
Blog Entries: 46
re: The Nature of Support and Resistance

That's the drill, as I mentioned in the longer post above and in more detail in the Dailies. The general idea is to find S&R then trade the extremes, selling R and buying S. The worst chop is most likely to be found at the midpoint, which in this case is 1415 (and it looks like we're going to open right there).

OTOH, moves do originate from the midpoint, and the midpoint sometimes acts unexpectedly as S or R. Seeing this can be frustrating. But if one reviews several dozen charts (or more), the probabilities for good entries with tight stops are most often found at the extremes.

Note: I should also point out that we'll be opening just above the midpoint of that long upmove from 5/9. So if price doesn't take off straight out, there may be a lot of jockeying here.

__________________
Db
Zen
MyBlog

Last edited by DbPhoenix; 05-21-2008 at 09:19 AM.
Reply With Quote