[jitasb]

Starting before market opens. If I draw in the major S/R levels from the premarket. Then watch how the price behaves at these levels.
As the day progresses, then update the S/R levels and add and delete others as appropriate depending whether price respects them or not.

For Example 1. A test of a level then a retest as confirmation it may hold.
For Example 2. A break of a level then immediate rejection of same level back to inside a range.

Would this be a reasonable start to investigating a possible trading strategy using only price action S/R levels ? Or is too simplistic ? And may I need more > such as pivots, prev day high lows etc.

Just wondering if anyone uses just price action and S/R levels alone as a method of trading. I'm currently doing some demo trading on this and am trying to do some backtesting as well to iron out the rules etc.

Would be useful to know if any other traders are trading in this way or similiar.

[mahesh]

Hello Jitasb,

What you are doing is right, however trading off a confluence of Different Pivots, Highs and Lows, SR Points is better. I assume what you are Scalping. If you are going for longer term scalp, also try to look at market flow for trading direction.

Hope this helps.

[srmfx]

You are describing the way I trade. In these crazy markets this is the only reasonable strategy for me. You never know the trend but the support and resistance levels are easy to identify. Also watch for the correlation between the major currencies.

[forrestang]

Originally Posted by jitasb »

Starting before market opens. If I draw in the major S/R levels from the premarket. Then watch how the price behaves at these levels.
As the day progresses, then update the S/R levels and add and delete others as appropriate depending whether price respects them or not.

For Example 1. A test of a level then a retest as confirmation it may hold.
For Example 2. A break of a level then immediate rejection of same level back to inside a range.

Would this be a reasonable start to investigating a possible trading strategy using only price action S/R levels ? Or is too simplistic ? And may I need more > such as pivots, prev day high lows etc.

Just wondering if anyone uses just price action and S/R levels alone as a method of trading. I'm currently doing some demo trading on this and am trying to do some backtesting as well to iron out the rules etc.

Would be useful to know if any other traders are trading in this way or similiar.

If this is how you "started" off trading, you are on the right track. I would suggest you keep this at the core of your logic. W/o starting to add to many other things. Just observe what's happening at these levels you see.

Many threads here with S/R as the main influence of the thoguht process. I would recommend some of the threads in the Wyckoff forum, or the acclaimed 'Real Time" Thread.


------EDIT----
Also IMO, just focus on your S/R leveels you either pick based on various highs and lows, or various trading ranges you see. Leave the calculated levels like floor pivots etc alone.

[jitasb]

Thanks for responses.

I am indeed reading thru some of the Wyckoff material.

[86834]

Most of technical analysis is just a self fulfilling prophecy, meaning that if every man and his dog is looking at a certain level, then it's likely to be important. You want to trade the blindly obviously levels to start with that everyone can see. Don't look for s/r or tiny times frames, look for s/r on the 30min, 60min and daily etc.

If you're new, check out my blog, I made a post yesterday of a list of tips to get you started.

[plungee]

Check out Al Brook's book, "Reading Price Charts Bar By Bar".

It allows trading from a minimalist POV & I find it a difficult but very accurate read. A lot of time must be spent learning the very exacting psychology of each price bar, not very obvious to anyone without years of experience.

He uses mostly just a 5 minute chart with a 20 period EMA, trades all instruments.

And, remember, no one wins all or even most of the time in this business.

[frankstar]

I think your on the right track. Have you thought about using some simple moving averages? I consider these moving support and resistance. I use the 10, 20, 50 and 200 SMA's - because many of the pro's use these as well, and place orders at and around these averages. You can often watch price bounce 20 - 50 pips when it hits these SMA's for the first time - especially the daily SMA's.

All I trade with are fib levels (monthly down to 1hour) moving averages and candlestick patterns. Other levels I'll mark in on my charts are 00 levels (1.6100, 1.4100, 81.00 for example) and highs / lows in the weekly chart. I find that if you have an SMA with a fib level, price will often bounce 20 - 50 pips.

I also watch how far price moves away from the 50 SMA - because price action does tend to oscillate around SMA's (other people often use 200SMA). If you get, for example a hammer in the 15 minute chart that has bounced off the 200MA and a 4hr 50% level, that is extended a long way from the 50SMA, and has started to bounce at the beginning of the US session, then I would go in on a day trade and aim for a good 50 pips.

Hope you find the post useful
Regards


Francis