DbPhoenix

Can you post a chart that illustrates what you mean by "the support/resistance lines that develop during the day"?

Understood. But, again, there are all sorts of lines that one can draw that have absolutely nothing to do with S/R. You say you don't know "HOW" to trade it, but one can't even begin to work on the how until he knows that the levels he's plotted are legitimate. I've done three threads on this and don't want to take up any more space here. But, again, I urge those who want to incorporate this into their trading to post charts after today's "close" which show what support and resistance they'll be looking for tomorrow and what they plan to do if and when price reaches those levels. Doing it tomorrow afternoon isn't going to be of much help.

But other than "here are my pivots" (which is cautionary right there), you don't explain what all these lines are or where they came from. Therefore, it's next to impossible to determine whether they are genuine S/R or just lines. For example, price drops off the bottom of your screen and after some time works its way back. Why? Where did it reverse? Was there support down there? Clearly there was or price wouldn't have reversed. But where was it, and why? Beyond that you have to decide how much risk you're willing to assume, what your target is, what signs of trouble you're going to look for that may signal that your target isn't going to be reached, etc, etc, etc. If you want buy here, put stop there, exit up there, it's unlikely that there will be enough hindsight charts to help you. Doing this in real time will more likely be of much greater help, but there are only three people in your room. How come?

If I may offer an example, the "Third Time's the Charm" setup, which is a classic example of the difference between following a setup and trading price action. The TTTC setup came about because somebody noticed that price, after testing a certain level twice, would often break through that level after a third test. The fact that price often broke through the level after only two tests or on the fourth or fifth or tenth or failed to break through at all and instead reversed was pretty much ignored. TTTC sounded good. But what in terms of price action is going on here? Price tests, say, R. Buyers are turned back because sellers aren't done. So buyers regroup and try again, buying up more of what sellers have to offer. But the sellers aren't done, so price is turned back yet again. But buyers aren't done yet. They regroup yet again for another try. This time, however, when they reach R, they find that sellers have pretty much sold what they wanted to sell, making the "breakout" not only possible but relatively easy (which is why low "volume" often accompanies such breakouts). But does the "third time" have anything to do with it? Of course not. It may take four tries. Or five. The success of the breakout will depend entirely on how much supply buyers are willing and able to absorb and how much supply sellers want to hand off. If buyers just can't absorb what sellers want to sell, they're turned back, and you have a reversal. So how do you know what to do in real time in this situation? You work with people who are trading whatever it is you're trading in real time. If you can't follow it in real time, much less trade it in real time, then all the rules and chart examples and setups on the planet aren't going to be of much help. You guys have a room set up for this purpose. It's up to you to make use of it and learn from it.

There are thousands of hindsight charts posted throughout TL that will tell you exactly how the trader allegedly traded whatever it was, but how is that going to do you any good (and if those postings were to do you any good, they would have)? Far more important is to locate support and resistance in advance, then determine in advance how you're going to trade it. Finding support and resistance after the fact is useless except for the "learning experience", as is determining afterward how you would have traded it. Why not determine today, after 1600 or so, what the support and resistance levels are for whatever it is you're trading, then post where you plan to enter and exit tomorrow if and when price reaches those levels, stops and all? Otherwise, it's just more shouldawouldacoulda.

I found this post on "Re: Futures I Trade Show & Brooks Book" interesting and have nominated it accordingly for "Topic Of The Month July, 2009"

I agree with rigel and Shamal, respectively. TradeGuider is a waste of money, and the trading platform is immaterial. If your charting program provides a price bar and a volume bar, you're in business. If even Sierra Charts is too expensive, look at QuoteTracker. It's free.

"OP" refers to the individual who made the opening post.

Or, as some have suggested, "if you can keep your head whilst all the other traders are losing theirs, you have no idea what's going on."

Depends on what you're going for: a few ticks, a few points, or letting your profits run until the trend is done. That, unfortunately, is a decision you have to make all by your lonesome.

I stumbled across this thread while doing a search for threads on support and resistance (why I was doing this is not important). But since the OP is long gone and this particular thread is in the Beginner's Forum, I'm posting my results here in hopes that I may save somebody some time (the last is, of course, the best ). Support and Resistance Support and Resistance in a Volatile Market Using Daily Support/Resistance for Intraday Trading What is Support and Resistance? Support and Resistance: Trading in Foresight

There are already several S/R threads about, in various forums. Starting another may be helpful, but what would be even more informative is an explanation -- as brief as you want it to be -- of how you go about finding S/R, how you use it to evaluate real-time setups, and when and why it's helpful and when and why it's useless or even misleading to you. In a nutshell, a "good level" is that at which traders balk and regroup, either retreating or busting through. If a given level is one which traders pay little or no attention to, then it's not a good level. In the meantime, do a thread title search for "support" or "resistance". There may be an old thread somewhere that you can resuscitate. Edit: You sparked my curiosity, so I did it for you. Here are several you may want to look at, including one here. http://www.traderslaboratory.com/forums/f34/support-resistance-4171.html http://www.traderslaboratory.com/forums/f32/support-resistance-volatile-market-4683.html http://www.traderslaboratory.com/forums/f104/using-daily-support-resistance-intraday-trading-3720.html http://www.traderslaboratory.com/forums/f30/what-support-resistance-161.html

A suggestion. Once upon a time I became involved in a "Ross Hook" thread. The participants were having all sorts of trouble making them work, as well as the "1-2-3s". The key problem as I saw it was that they were finding these "hooks" all over the place, even in the middle of nowhere. Even worse, they were often getting trapped into a counter-trend-trading loop. I suggested that they first locate support and resistance in their charts (if they knew how to do so), then play only those Ross setups that occurred against one or the other, i.e., against either support or resistance. The success rate was, of course, much higher. Moral of the story is that those who are having trouble making these setups work may want to plot support and resistance first, then take only those setups that bang up against one or the other, as you suggest. If it doesn't help, then at least the trader is no worse off than before.

If I "expand", I'll likely hijack the thread since "trading price action", to me, means trading the movement of price regardless of how the movement is illustrated. The Brooks approach -- like any approach which focuses on indicators or candles or bars or some other form of illustration -- is a contradiction in terms, i.e., if one is trading price action by trading bar by bar, then he's trading bars, not price action, substituting the bars and whatever setups are created with them for the indicators that he's worked so hard to put behind him. Understanding support and resistance and how they're created by traders is essential to trading price action. Otherwise, one is limited to trading setups and what may be meaningless lines, and repeated failures can lead one to think that support and resistance are bunk and "don't work". But I've gone into all this elsewhere in exhaustive and probably boring detail, so I won't go into it again, particularly since I've probably already offended most of the people who post to this thread. Rather I'll just provide an example, and those who are interested can pursue the link just above. Leading up to yesterday, note here that after a nice rally to 95/96, traders began poking the 93/92 area. You don't know why, and it's not necessarily important. What is important is being aware of this testing and the fact that traders keep bouncing off the same levels. When price eventually breaks through these levels, the best it can do on a rally is work its way back to 91. These two levels become potential levels of importance because traders turned price there. When price shot northward at the open, it stalled at 91, then advanced to 92. The trader who had noted the R levels ahead of time would be ready to act. Now given this particular "setup", the most logical place to enter would be below the bar that tested 92. But this would mean a five-point stop, and that's a lot of stop. It benefits the trader, therefore, particularly one who is following price action, to "open" the bar and see what's going on inside. After all, trading a bar, particular one that summarizes quite a lot of time, involves watching price slide up and down in the same place, like running up and down stairs. If one wants to see what price is actually doing, it becomes necessary to use a smaller interval. Here one can see more of the activity that's creating the 5m bar, and he can enter a short at a higher level, one which provides a much tighter stop. But, again, placing the entry is only the latest step in a series of steps that one takes when preparing for the trading day, in this case going back several days to find those levels of support and resistance which are most likely to exert an influence on the morning's trading action. Today, that same 92 level that was tested yesterday morning and yesterday afternoon (and from above, this morning, premkt) provided a clean short at 0955 this morning. Even though this isn't Brooks, understanding it may help the Brooks followers to distinguish among those setups which are most likely to pay off and which are more likely to fizzle. Now back to your regularly scheduled program. And my apologies to zdo.

Given the hundreds of posts in this thread, it is likely that this one will be lost. However, given that so many of the people posting here are new, I'll point out once that ignoring overnight activity is a mistake since this is so often where the movement of price after the NY open is "telegraphed". There are no "gaps" in instruments that are traded around the clock. We can create them by choosing not to collect data for a certain time period, but the trades are nonetheless being made and the buying and selling behaviors which result in price movement are nonetheless being illustrated. The boxing match does not begin with the bell. The race does not begin with the flag or the starter's pistol. There is a great deal of preparation that must take place before one even approaches the field or the track or the ring if he is to have any hope of success. If he does nothing until the signal is given, he will very likely have little or no idea where he is or what's happening around him, much less what to do about it. This morning, for example, the ES has once again, by its own action, reiterated the importance of 890 and 892. Is the trader aware of that? Does he know what it means? Does he know what to do about it?

True. Resistance on the ES this morning was at 891-2. Entry was at or about 890. After that, it was a simple matter of following the trend to 882. And only one trade. Good luck tomorrow.

First, whatever does or does not go on at ET is irrelevant to what goes on at TL. Second, neither Spydertrader nor Jack Hershey are required to prove anything to anybody unless they are selling something. Third, there is no such thing as a "real-time" trade posted to a message board. Even if there were, neither Spytrader nor Jack Hershey are required to post one. Nor are either of them required to provide real-time trades in chat, particularly since such trades can also be massaged and do not offer proof of anything. Fourth, TL members do not need to "press on" with anything. The chief difference between ET and TL is that TL members will examine a particular assertion or approach or "method", and, if it appears that there is no substance to it, they will ignore it, and it will drop to the bottom of the barrel. ET members, on the other hand, will launch into multi-hundred-post threads which consist mostly of personal attacks, insupportable rebuttals, and so forth. If you leave this alone, it will wither since TL members are more interested in the work than in pointless arguments about trivial pursuits. If you don't leave it alone, you will prompt and perpetuate just that outcome which you claim you want to avoid. Even if it were possible to prevent the gullible from being led down the garden path, one would first have to determine what is or is not a garden path, then determine who is or is not qualified to prevent the gullible from walking it. There are a number of ongoing threads which to me are pure nonsense, and those who follow what's being said in those threads are very likely to come to grief. But even if I could prove beyond any reasonable doubt that they are wasting their time, it's really none of my business. People have to do what people have to do, and no one has a lock on the path to profitability. Locusts swarm and then move on.

There's a long answer to this and a short one. The short one can be found here. The long answer, in a nutshell (if that's not a contradiction in terms), is that Wyckoff -- along with Dow, Elliott, Schabacker and a few others -- was an original. Thus much of what we do today is "based on" Wyckoff, from Dunnigan to Ross to Darvas to CANSLIM. But to suggest that one is "applying Wyckoff" when he is using something several times removed from the original material is to do an injustice to that material. This is not to say that the various adaptations and modifications and reinterpretations are worthless. They may in fact have much to offer. But those variations are not the business of the forum, which is understanding and applying the original material. Once one has gone through that process, he is then in a better position to determine whether or not a given variation is an improvement. As to your question regarding a breaking of support, one can put both the question and the answer in simple terms that don't require extra jargon as long as one focuses more on the behaviors of those who are breaking those supports and less on what terms to use to describe their efforts. However, coming up with a set of rules, or even of guidelines, is not likely to get the trader very far. If you can post charts which illustrate your questions, you will likely be better able to recognize these phenomena in future situations, preferably in real time.

Where we are now:

And support and resistance tell us once again what to do and when to do it, all plotted in advance. Price drops away from 80, down thru 77 to the bottom of last Thursday's and Friday's range (1), then back up for another test of R at 77 (2), then down to S at 40. Is it really this simple? Yes, if one is focusing on price movement rather than on what one is using to illustrate it. And since this is the last one, some suggestions for today's entries, on a blow-up of the overnite and morning (these entries are standard and have been addressed in other threads). First, given the demonstrated weakness, a short off the test of S turned R at 77 (2). This takes place an hour before the open. Second, a short off S turned R at 67, just before the opening bell. Third, a short off the springboard which forms just after the open (this lasts slightly less than a minute).

Funny, if you have the right sense of humor. A near-mirror image of yesterday, up to a test of R, which failed, then back where we started. Again. It doesn't take an expert chartist to see that 80+/- is important. All current S/R levels hold for tomorrow.

OTOH, that "fell out to the downside" was a shakeout, and led to a move to the opposite. Again, neither may have been worth taking, but one can't know that in advance. What one can be cognizant of is the possibility of a thrust or shakeout when playing these, and not get freaked when price winds up going in the opposite direction. The dynamics of this endgame are not difficult to understand. The hinge, after all, is created because of differences of opinion. That this testing should continue once one side or the other pushes price out of the hinge should not come as a surprise. But clearly one has to be quick on one's feet to avoid getting trampled.

Not much to discuss re follow-up. Price rose to R, as anticipated (not predicted; anticipated), then dropped to the bottom of Thursday's and Friday's trading range (tested yesterday), again as anticipated. Then wound up back at R represented by that last major trading range, again as anticipated (though not predicted). This level is also now clearly the midpoint of this most recent range (66 to 92) and assumes the importance attached to a midpoint. And since we're back where we started, all the S/R levels apply to tomorrow as well.

You must have missed my PS on my previous post. FW posted the same thing only using a 1m interval, and it is a hinge. And, except for that one spike, which may be an anomaly, volume does decline throughout (more or less). As for whether any of this amounted to a trade, sellers had their shot, then buyers, then they wound up back where they started. But you can't know that ahead of time, so if you're going to play these, you have to play all of them. Otherwise, they'll drive you crazy. Ask atto. He trades them as a matter of course.

I should also point out that what I've posted here is what I consider to be absolute minimum to engage the curiosity. Those who want to go on, have. Most find way too much here as it is, even if they explore only the stickies. This is not intended to be an extension course but a discussion forum. Screen time is at least as important, if not more so, than how much of the course one reads.