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kvn

Support and Resistance

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Hello, I've been trading futures for about a year now, a little more than a month and a half ago I cleaned off my charts and have been trading (scalping) only support/resistance. Horizontal levels that is, no fancy trend lines, shapes, etc. It's actually been the most profitable method for me, however it could use some refinement.

 

There isn't too much out there that goes into advanced SR that I've found. (I guess maybe because it's a simple concept, buy S, sell R. :o) So I was hoping to see what some of the more experienced traders have to say on the subject and share some of my findings as well, if there is enough interest.

 

I'd like to go into things such as the various ways of finding SR, gauging which levels are more likely to hold, entry timing techniques and so on.

 

Currently I'm using swing H/L's as SR levels and entering on retracements of breaks as soon as it shows signs that it is holding. For a more aggressive entry I am working on using areas of hesitation instead of swings and entering just on a retracement of a break, before the level shows signs of holding to reduce risk.

 

If you have something to add, please do, I am very interested in this subject.

Edited by kvn

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Welcome kvn to the forum. To get some feedback quicker, I think you'll find that providing screenshots w/ annotations the best way. Here's how to upload charts. I recommend SnagIt for a user friendly screenshot program.

 

There's some good stuff on TL, but feel free to get your own discussion going about what you use and how. Sometimes just getting another set of eyes on your charts can spark a good discussion.

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I have read about every thread in the TA and MP section, as well as suggested books from those threads. A lot of it I do not relate to cut and dry SR. However, that was before I really had a grasp on SR, so it might do me well to check them out again.

 

If we have any traders that use strictly SR, and I mean just a horizontal line on the chart, following swings, hesitations, etc, that's really what I'm interested in. A lot of walter's work with SR scalps is just what I'm doing but looking to refine with more precision or better entry techniques. If anyone is familiar, any specific recommended reading is appreciated.

 

Thanks brownsfan, I'll get a chart up. It's just real basic resistance becomes support and vice versa that I'm looking to refine by figuring out the most reliable types of swings/hesitations, etc, ie: 2 swing highs followed by a hesitation on the same level prior to a break seems to make for a decent level to go long at after a retracement.

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I have read about every thread in the TA and MP section, as well as suggested books from those threads. A lot of it I do not relate to cut and dry SR. However, that was before I really had a grasp on SR, so it might do me well to check them out again.

 

If we have any traders that use strictly SR, and I mean just a horizontal line on the chart, following swings, hesitations, etc, that's really what I'm interested in. A lot of walter's work with SR scalps is just what I'm doing but looking to refine with more precision or better entry techniques. If anyone is familiar, any specific recommended reading is appreciated.

 

Thanks brownsfan, I'll get a chart up. It's just real basic resistance becomes support and vice versa that I'm looking to refine by figuring out the most reliable types of swings/hesitations, etc, ie: 2 swing highs followed by a hesitation on the same level prior to a break seems to make for a decent level to go long at after a retracement.

 

Kvn-

Maybe since you are a seasoned S/R trader you could expound to the masses about how bars/candles etc (whatever you happen to use to chart) act around these S/R lines. I think a good healthy discussion on the topic with various viewpoints is in order.

 

Maybe we can spark a discussion about what you, myself, or other traders "see" when we get to a S/R line and go from there.

 

As an example: I happen to utilize tick volume (hold off the flames fellow gents) that when a trend is approaching the resistance line, if volume is declining the chances of it breaking that line are slim.

 

And on and on. We could also discuss price action as a whole around these areas, tricks of the trend etc. One of my favorite is the drop down, rocket up, locking in the early longs.. only to see it return to the same area of Support to re-test.. frustrating the bejeezus out of the uninformed. :crap:

 

Thoughts?!

Aaron

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I have read about every thread in the TA and MP section, as well as suggested books from those threads. A lot of it I do not relate to cut and dry SR. However, that was before I really had a grasp on SR, so it might do me well to check them out again.

 

If we have any traders that use strictly SR, and I mean just a horizontal line on the chart, following swings, hesitations, etc, that's really what I'm interested in. A lot of walter's work with SR scalps is just what I'm doing but looking to refine with more precision or better entry techniques. If anyone is familiar, any specific recommended reading is appreciated.

 

Thanks brownsfan, I'll get a chart up. It's just real basic resistance becomes support and vice versa that I'm looking to refine by figuring out the most reliable types of swings/hesitations, etc, ie: 2 swing highs followed by a hesitation on the same level prior to a break seems to make for a decent level to go long at after a retracement.

 

 

Hi Kvn, that chart there resembles the chimps flips trades... you can check them here http://www.traderslaboratory.com/forums/f34/the-flip-trade-support-and-resistance-1714.html thats a very solid classic trade where you can take a S&R level switching roles... now the chimp basicly did use his flips on a "momentum" enviroment in order to have a better RRR.... thats my 2 cents in terms of S&R.... cheers Walter.

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Maybe we can spark a discussion about what you, myself, or other traders "see" when we get to a S/R line and go from there.

 

As an example: I happen to utilize tick volume (hold off the flames fellow gents) that when a trend is approaching the resistance line, if volume is declining the chances of it breaking that line are slim.

 

That is exactly what I'm looking for. It doesn't really matter what TA you use, the goal is to find out how to objectively identify SR that may potentially be more important than others. I'll see what I can get together to start some discussion.

 

Hi Kvn, that chart there resembles the chimps flips trades... you can check them here http://www.traderslaboratory.com/forums/f34/the-flip-trade-support-and-resistance-1714.html thats a very solid classic trade where you can take a S&R level switching roles... now the chimp basicly did use his flips on a "momentum" enviroment in order to have a better RRR.... thats my 2 cents in terms of S&R.... cheers Walter.

 

Hey Walter, I'm a big fan! :thumbs up: Your threads have helped greatly to organize and confirm what I thought I was seeing, I read them weekly. Basically what I'm looking to do is add precision to the flip trade to minimize risk. I might see the charts differently because I have difficulty taking a trade if price only approaches a recently broken S/R level and then turns away. The attachment above is a very common occurrence and I mean price comes back to previous S/R, almost to the tick. You just have to figure out which SR level is most important.

 

What I saw in your charts was price coming close to previous S/R, but I have been observing price coming within 1 tick of previous S/R often. And I'm trying to figure out how to use this. Ideally, placing a limit order at the recently broken S/R level, expecting a retracement, to minimize risk. But what kind of conditions should there be, how do we know if this particular S/R level is important.

 

In the attached image, 2 of the 4 trades worked out (2 wins, 1 loss, the last one would have broke-even) because the SL is tight and we ride the winners, it works out. I'm just trying to filter the trades further if possible as not all of the setups are this clear.

 

By the way, I'm using tick charts as I find they are more accurate in terms of SR than time charts. Depending on which product and time of day, it's anywhere from a 10 to a 100 tick chart. SL's are tight below/above S/R and we trail winners, taking whatever the market will give before another trading opportunity occurs.

 

P.S. You have to maximize the attachment otherwise you won't see the S/R lines it seems.

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Hello, I've been trading futures for about a year now, a little more than a month and a half ago I cleaned off my charts and have been trading (scalping) only support/resistance. Horizontal levels that is, no fancy trend lines, shapes, etc. It's actually been the most profitable method for me, however it could use some refinement.

 

There isn't too much out there that goes into advanced SR that I've found. (I guess maybe because it's a simple concept, buy S, sell R. :o) So I was hoping to see what some of the more experienced traders have to say on the subject and share some of my findings as well, if there is enough interest.

 

I'd like to go into things such as the various ways of finding SR, gauging which levels are more likely to hold, entry timing techniques and so on.

 

Currently I'm using swing H/L's as SR levels and entering on retracements of breaks as soon as it shows signs that it is holding. For a more aggressive entry I am working on using areas of hesitation instead of swings and entering just on a retracement of a break, before the level shows signs of holding to reduce risk.

 

If you have something to add, please do, I am very interested in this subject.

 

Here is my take on trading support and resistance levels with what I called the "Z3 Cycle Trading with PALS [Price Action Levels]". I only take my entries off of bounces on pre identified key zone levels as it goes along with what I termed "Market Flow" and "Market Timing". With my lazy way of daytrading and swing trading, I let a couple of indicators do the line drawings for me. I only daytrade YM and/or ES along with selected forex pairs for 2-3 hours a day in 1-2 trades, out and done on or before NY martini lunch time. I use MT4 and Ninjatrader charting platorms to monitor only 1m timeframe for each instrument I am trading.

 

Proper trading of S/R levels seems to be the closest thing one can get to that elusive and mostly sought after "grail". :cool: I have attached an MT4 setup for your viewing. If need be, I can attach an NT chart later on.

 

ENJOY!

 

ztrader

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Here is my take on trading support and resistance levels with what I called the "Z3 Cycle Trading with PALS [Price Action Levels]". I only take my entries off of bounces on pre identified key zone levels as it goes along with what I termed "Market Flow" and "Market Timing". With my lazy way of daytrading and swing trading, I let a couple of indicators do the line drawings for me. I only daytrade YM and/or ES along with selected forex pairs for 2-3 hours a day in 1-2 trades, out and done on or before NY martini lunch time. I use MT4 and Ninjatrader charting platorms to monitor only 1m timeframe for each instrument I am trading.

 

Proper trading of S/R levels seems to be the closest thing one can get to that elusive and mostly sought after "grail". :cool: I have attached an MT4 setup for your viewing. If need be, I can attach an NT chart later on.

 

ENJOY!

 

ztrader

 

 

No Doubt you are a Lazy man jejeje... hay que disfrutar la Vida hermano jajaaj... cheers Walter.

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That is exactly what I'm looking for. It doesn't really matter what TA you use, the goal is to find out how to objectively identify SR that may potentially be more important than others. I'll see what I can get together to start some discussion.

 

 

 

Hey Walter, I'm a big fan! :thumbs up: Your threads have helped greatly to organize and confirm what I thought I was seeing, I read them weekly. Basically what I'm looking to do is add precision to the flip trade to minimize risk. I might see the charts differently because I have difficulty taking a trade if price only approaches a recently broken S/R level and then turns away. The attachment above is a very common occurrence and I mean price comes back to previous S/R, almost to the tick. You just have to figure out which SR level is most important.

 

What I saw in your charts was price coming close to previous S/R, but I have been observing price coming within 1 tick of previous S/R often. And I'm trying to figure out how to use this. Ideally, placing a limit order at the recently broken S/R level, expecting a retracement, to minimize risk. But what kind of conditions should there be, how do we know if this particular S/R level is important.

 

In the attached image, 2 of the 4 trades worked out (2 wins, 1 loss, the last one would have broke-even) because the SL is tight and we ride the winners, it works out. I'm just trying to filter the trades further if possible as not all of the setups are this clear.

 

By the way, I'm using tick charts as I find they are more accurate in terms of SR than time charts. Depending on which product and time of day, it's anywhere from a 10 to a 100 tick chart. SL's are tight below/above S/R and we trail winners, taking whatever the market will give before another trading opportunity occurs.

 

P.S. You have to maximize the attachment otherwise you won't see the S/R lines it seems.

 

thanks Kvn for your kind words... trading MUST be a pleasant experience ¡¡ S/R its a great aproach... as flips are also great for begginers... cheers Walter.

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That is exactly what I'm looking for. It doesn't really matter what TA you use, the goal is to find out how to objectively identify SR that may potentially be more important than others. I'll see what I can get together to start some discussion.

 

 

Hey kvn, Actually you don't need to use any 'TA' -- reading Price action round these levels can get you in just as easily.

 

You know that is one of my quests....better identifying S/R. That takes a couple of forms, distinguishing the major areas from minor and when you have an area trying to get a 'tighter' area that you expect to contain price and/or determing which edge that it will react too.

 

However, deep down I know this is kind of a fools errand (searching for a grail that does not exist). It's important to remember trading is a game of probabilities rather than absolutes.

 

Having said that as another poster said take a good look at the Whycoff area and DBPhoenix's blog. You might find his rectangles interesting. There is also another thread on S/R somwhere. Oh and the thread 'busy day tomorrow' has some good currency examples amongst the chit chat.

 

One of the nice things about Traders Laboratory is the large number of people here that use basic principles like S/R & PA to trade rather than the wierd wonderful and slightly esoteric that you tend to get in forums. An ideal place for your approach.

 

Cheers,

Nick

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However, deep down I know this is kind of a fools errand (searching for a grail that does not exist). It's important to remember trading is a game of probabilities rather than absolutes.

 

One of the nice things about Traders Laboratory is the large number of people here that use basic principles like S/R & PA to trade rather than the wierd wonderful and slightly esoteric that you tend to get in forums. An ideal place for your approach.

 

Cheers,

Nick

 

Absolutely agreed. Trading is about probabilities and pushing it hard when the odds are stacked in your favor. I do not pay any attention to classic technical analysis patterns at all. Simple price action with volume and understanding key levels of potential support and resistance works best for me.

 

However, price patterns have been important in my trading. By this I am referring to certain price bar patterns like WRB followed by upthrust, break of the low followed by bar higher than 2 bars back, support followed by test and higher low, etc.... I am mainly a reversal type trader looking for particular price patterns. I personally never found classic technical analysis patterns to be of any use. But thats just me.

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S/R is my core trading strategy, and has been since I made the turn. I determine the S/R levels by using pviot prices. And sicne I promised a little meat with my next post, here you guys go.

 

Using your first tick attachment.

 

Wait for the first pivot high and pivot low to form. The order doesn't matter.

this forms the Open S/R box. (#1 and 2)

 

Wait for a new pivot price to form outside the OSR. Since it forms above the OSR I am looking to go long. I now wait for the pivot low to form. I want the market to trade completely outside the range of first bar that makes the pviot low. I now have my Zone.

 

In this order, I will go long on a break of of the second pivot low(the green dot), or a break of the most recent high on the retrace leg, or a break of the second pivot high. The initial stop is the OSR support level.

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Bootstrap,

 

Your setup looks very similar to the RePo formation that is found in the Trend Dynamic course. When a previous low or high pivot swing is broken, the weaker holders are impaled and have been stopped out. Now the Seventh Law of Trend Dynamics occurs which is "Dramatic price movements tend to unfold from price structures that minimize profitable participation."

This course really offers some excellent market principles that can bring a trader to a new richer understanding of price action and the transitional contexts of deceptions used by the tiny and successful minority of traders.

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BlowFish -- After reading your post this morning, I decided to throw precision out the window and zoom out the charts, and actually did quite well. Although I need to work on cutting the losers short and letting the winners run. I liked precision because I'd be able to get by with a 2 tick SL, hence my quest for better SR understanding. I suppose it is a fools errand after a certain point but I think there is much more to understand, at least for me. I will check out the recommended reading.

 

ztrader -- What pre-identified levels are those? Are they the OHLC for the prev/curr day & hour as displayed in the box? I've played around with those and various other levels briefly but I might have been looking for too precise of interaction than I saw. For the Forex pairs, do you calculate the levels based on NY session or do you include overnight?

 

bootstrap -- Thanks for sharing. If you have a chance, I'd like to see another example. Would you have taken the trade at the break of the second pivot high that you have labeled, or would that have been taken on the retrace, at the point where I had the blue arrow originally? The levels are the same for both of those pivots, so I assume you'd take a break, but not positive. Had the pivot high after the 2nd one you marked gone higher and the pivot low you marked with a green dot not have broken the previous pivot low, where would you be looking to take an entry?

 

Thanks for the contributions so far, good stuff.

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You reminded me of the other point I was going to make! Start with the big picture maybe the daily a 240minute hourly whatever to determine the major areas, it's easy to get drawn into the minor vibrations if not careful. Of course when you are in a major area then drill down to a faster chart to get a bit more fitness or to actually trigger entries.

 

I do it myself far too often...get drawn into the smaller undulations and essentially scalping back and forth smaller swings.

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You reminded me of the other point I was going to make! Start with the big picture maybe the daily a 240minute hourly whatever to determine the major areas, it's easy to get drawn into the minor vibrations if not careful. Of course when you are in a major area then drill down to a faster chart to get a bit more fitness or to actually trigger entries.

 

I do it myself far too often...get drawn into the smaller undulations and essentially scalping back and forth smaller swings.

 

This is my struggle as well, getting sucked into the intraday noise. :(

Also I'm trying to find the best timeframe for the YM to mark broad term key levels of S&R. 60 minute seems to be one option but I have limited data also with Think or swim. I can only do 20 day intraday charts. Now I can open it up to daily/weekly/monthly and get 20 years but it's not as granular as I'd like.

 

I need to get some good historacle data somehow. LOL

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This is my struggle as well, getting sucked into the intraday noise. :(

Also I'm trying to find the best timeframe for the YM to mark broad term key levels of S&R. 60 minute seems to be one option but I have limited data also with Think or swim. I can only do 20 day intraday charts. Now I can open it up to daily/weekly/monthly and get 20 years but it's not as granular as I'd like.

 

I need to get some good historacle data somehow. LOL

 

 

Mike, I personally conquered noise using VMA based indicators, thats why my new forex methods performs so well... cheers Walter.

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Entries.....Oh where do we start. Maybe this can get you thinking about what you are trying to accomplish.

 

When designing your entry strategy, you have to follow a fundamental rule. Your Entry strategy has to guarantee that your strategy captures every move it was designed for.

 

To do this, you cannot rely on a single entry. (i.e. only buy at support, only buy break of resistance, etc)

 

So with a support and resistance strategy, you know that you will be buying/selling at the S/R levels. But if Support is 1275 you can't just enter at 1275. The market may or may not reach it.

 

Using support for the example. Once support is in place, you have to be ready to enter: at support, at the most recent H/L if support is not reached, or at a break of R if it never retraces back towards the support level.

 

If I had traded your chart, i would have planned on entering at a breach of the second support line (at the green dot). If the market had not retraced back to the second support line, I would have looked to enter at a recent H not yet penetrated and if it blasted back up (never retracing) I would have entered on a penetration of the second resistance line I drew.

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MC data is a problem when you are making yearly lows. You could always use the index rather than the future for longer term levels the patterns match but the levels are off of course. Still it gives an idea that you are coming up on multi year support fro example.

 

Bootstrap interesting point. Of course if you use a break out of some sort (e.g. break out of previous bar H/L on a low time frame chart) you will be sure of an entry. If you use a limit against the level you might miss the boat (of course the latter will often give better trade location). No reason not to use both.

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You are spot on about using a lower time frame, but I didn't want to get to far from my original post since I was using just the one chart.

 

I am a big proponent of having multiple entry points. The one thing you do not want to do is watch the market move the way you wanted only to say, "Man...Only if it had moved two more ticks up/down my order would have been hit and I would have hit a monster move."

 

And since I am on the topic of multiple entries, I use multiple stop loss points as well as multiple targets. Some are resting in the market(stops) and some are mental. For anyone starting out, if you do not have the ability to use mental entry/exit points "DO NOT USE THEM." But order types are for another day.

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S/R is my core trading strategy, and has been since I made the turn. I determine the S/R levels by using pviot prices. And sicne I promised a little meat with my next post, here you guys go.

 

Using your first tick attachment.

 

Wait for the first pivot high and pivot low to form. The order doesn't matter.

this forms the Open S/R box. (#1 and 2)

 

Wait for a new pivot price to form outside the OSR. Since it forms above the OSR I am looking to go long. I now wait for the pivot low to form. I want the market to trade completely outside the range of first bar that makes the pviot low. I now have my Zone.

 

In this order, I will go long on a break of of the second pivot low(the green dot), or a break of the most recent high on the retrace leg, or a break of the second pivot high. The initial stop is the OSR support level.

 

I found this an interesting variation on an opening range break out though got a little lost at the end.

 

1) Wait for pivot high outside range - check.

2) Wait for retrace and pivot low to form - check.

3) Wait for market to trade completely outside range of pivot low bar. Do you mean wait for a whole "non overlapping" bar with this bar? Ok that confirms the pivot low. Do you go long the next bar open?

 

Just seems a simple but quite elegant way to trigger so I though it worth understanding properly. Thanks for sharing.

 

Cheers.

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Attached is the perfect setup for confirming the Pivot Low.

 

Basically you want the market to trade back towards the Pivot high, where the low is above the High of the Pivot Low.

 

Entry points are:

 

1) touching/penetrating support.

2) most recent high if market retraces a little but never reaches support level3) at resistance if market continues to move without a retracement towards support.

 

All of this is just the opposite for a short bias.

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Hello, I've been trading futures for about a year now, a little more than a month and a half ago I cleaned off my charts and have been trading (scalping) only support/resistance. Horizontal levels that is, no fancy trend lines, shapes, etc.

 

I don't quite understand the logic why the levels have to be horizontal only?

In your chart attachment, I actually see a horizontal trendline that has been tested twice, hesitated, broken through, and came back for the retest. It is been my experience that the same principle should hold for trendlines at an angle but you choose to ignore. I am kinda lost here ?

 

attachment.php?attachmentid=7316&stc=1&d=1216293673

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    • Back in the early 2000s, Netflix mailed DVDs to subscribers.   It wasn’t sexy—but it was smart. No late fees. No driving to Blockbuster.   People subscribed because they were lazy. Investors bought the stock because they realized everyone else is lazy too.   Those who saw the future in that red envelope? They could’ve caught a 10,000%+ move.   Another story…   Back in the mid-2000s, Amazon launched Prime.   It wasn’t flashy—but it was fast.   Free two-day shipping. No minimums. No hassle.   People subscribed because they were impatient. Investors bought the stock because they realized everyone hates waiting.   Those who saw the future in that speedy little yellow button? They could’ve caught another 10,000%+ move.   Finally…   Back in 2011, Bitcoin was trading under $10.   It wasn’t regulated—but it worked.   No bank. No middleman. Just wallet to wallet.   People used it to send money. Investors bought it because they saw the potential.   Those who saw something glimmering in that strange orange coin? They could’ve caught a 100,000%+ move.   The people who made those calls weren’t fortune tellers. They just noticed something simple before others did.   A better way. A quiet shift. A small edge. An asymmetric bet.   The red envelope fixed late fees. The yellow button fixed waiting. The orange coin gave billions a choice.   Of course, these types of gains are rare. And they happen only once in a blue moon. That’s exactly why it’s important to notice when the conditions start to look familiar.   Not after the move. Not once it's on CNBC. But in the quiet build-up— before the surface breaks.   Enter the Blue Button Please read more here: https://altucherconfidential.com/posts/netflix-amazon-bitcoin-blue  Profits from free accurate cryptos signals: https://www.predictmag.com/ 
    • What These Attacks Look Like There are several ways you could get hacked. And the threats compound by the day.   Here’s a quick rundown:   Phishing: Fake emails from your “bank.” Click the link, give your password—game over.   Ransomware: Malware that locks your files and demands crypto. Pay up, or it’s gone.   DDoS: Overwhelm a website with traffic until it crashes. Like 10,000 bots blocking the door. Often used by nations.   Man-in-the-Middle: Hackers intercept your messages on public WiFi and read or change them.   Social Engineering: Hackers pose as IT or drop infected USB drives labeled “Payroll.”   You don’t need to be “important” to be a target.   You just need to be online.   What You Can Do (Without Buying a Bunker) You don’t have to be tech-savvy.   You just need to stop being low-hanging fruit.   Here’s how:   Use a YubiKey (physical passkey device) or Authenticator app – Ditch text message 2FA. SIM swaps are real. Hackers often have people on the inside at telecom companies.   Use a password manager (with Yubikey) – One unique password per account. Stop using your dog’s name.   Update your devices – Those annoying updates patch real security holes. Use them.   Back up your files – If ransomware hits, you don’t want your important documents held hostage.   Avoid public WiFi for sensitive stuff – Or use a VPN.   Think before you click – Emails that feel “urgent” are often fake. Go to the websites manually for confirmation.   Consider Starlink in case the internet goes down – I think it’s time for me to make the leap. Don’t Panic. Prepare. (Then Invest.)   I spent an hour in that basement bar reading about cyberattacks—and watching real-world systems fall apart like dominos.   The internet going down used to be an inconvenience. Now, it’s a warning.   Cyberwar isn’t coming. It’s here.   And the next time your internet goes out, it might not just be your router.   Don’t panic. Prepare.   And maybe keep a backup plan in your back pocket. Like a local basement bar with good bourbon—and working WiFi.   As usual, we’re on the lookout for more opportunities in cybersecurity. Stay tuned.   Author: Chris Campbell (AltucherConfidential) Profits from free accurate cryptos signals: https://www.predictmag.com/   
    • DUMBSHELL:  re the automation of corruption ---  200,000 "Science Papers" in academic journal database PubMed may have been AI-generated with errors, hallucinations and false sourcing 
    • Does any crypto exchanges get banned in your country? How's about other as Bybit, Kraken, MEXC, OKX?
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