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Day Trading Support/Resistance Levels on the E-Mini S&P500 Futures
I agree @djkiwi - those swift rejections are indeed important.
In the pic above "what happens next" is key - if the market carries on up - then the pullback from C (imagine point D being the end point) would be largely irrelevant because it broke out FROM B.
I really should have been comparing points A & B as support - that makes for a better analogy.
If C is swiftly rejected and we move down, then C is going to be an interesting level for sure but I still like to look at the low volume areas. They are less visually appealing (which means less little fish for the sharks to eat) but they are a lot more telling in terms of going from price acceptance->price discovery phases.
As we leave the price acceptance phase where we balanced and traded millions of contracts, there will be people defending the area we broke out from. They will not want to see it go back into that old area of acceptance. The bit int he middle were relatively few contracts traded. Less relevant IMO.
I know you don't want to turn this into a journal, but I am learning a lot from the examples and explanations you have posted. Pleas keep them coming...I promise to press the "Thanks" button
I'm starting this thread for the benefit of all for trade setups with 90%+- accuracy and reliability. When I say this I'm talking about posting trades with obvious levels of heavy support and resistance where not getting in seems like the dumbest thing to do. For the Negative Nancy's out there please dont scorn me on the 90% accuracy figure. With most of these trades you could atleast scalp for 20 pips, others have paid out hundreds of pips.
If you feel you have something please post but make sure your confidence level is way above average."
thanks
* If investing gets too difficult for a seventh grader to understand, the system is needlessly complex
* Markets produce an enormous volume of information, much of which is redundant
* In every game and con there's always an opponent, and there's always a victim. The trick is to know when you're the latter, so you can become the former
Seems I bit off a little more than I could chew in the past few weeks in terms of other commitments. Anyway, I'm hoping for a full uninterrupted week of trading this week.
We are are at an interesting point Support & Resistance wise:
1342.25 is August Low. On Thursday we turned just before the number and Friday we went through it a few ticks & then turned.
My thoughts, with significant areas such as this are to NOT TRADE THEM at all. So, even though I have a way to play a reversal even if it blows through or falls short, I will not trade an area like this that is going to be significant to a lot of longer term (or 'other timeframe') players.
I think that areas like this are too crowded, with too many people looking to do stuff. It makes it very hard to read. I also think these areas are prime locations for market manipulators to shake people out of position/run stops.
So - I would rather use an area like this to SET BIAS. Know the area, watch it bounce, if you see that this is going to be sustained, take a later entry.
I know there are people that won't like this. For instance, I know of 1 educator that teaches people that you must get "wholesale prices" and that if you don't get the wholesale price, you are "retail" and this will be your demise. On the face of things, this sounds very appealing. The smart people buy the bottom of the move, right?
Here's the bottom of Fridays move (the blue line is the August low).
So 261 smart traders got the wholesale price & everyone else was a putz.... really?
OK, so of course I am exaggerating to make a point. But then so do these "wholesale price" people. When the market moves up, the move itself is not smart people at the start and then idiots thereafter. Look at the size going through on the tape. 500 lot buy market orders going through 4 points above the low? Not smart money?
123k contracts traded on the first push up off the low. 81k contracts traded on the next push up, 54k contracts on the next one.
I think the concept of "late" is somewhat overrated. If you look at John Hoaglands order flow webinar, he explains it very well when he discusses large players moving the "line in the sand" up as a move is under way. They don't just buy at the bottom where the "wholesale price" is. They buy all the way up. Smart money. Fancy that.
Another proponent of "not late" is Kam at L2ST. I can't remember which of his webinars it was in but he is pretty vocal on this point. How can it be late if you make money from it? I'm not saying you should wait for a volume spike at the end of a 15 point move up and buy it. That WOULD be late. I'm just saying catching crowded tops & bottoms isn't for everyone. Sure isn't for me. That does not make us dumb money.
It's all about confirmation. Confirmation costs ticks. Lack of confirmation = more stop outs. It's a trade off.
Anyway - we can see on Friday we did blow through 42.25. We then popped up 10 points in a single move. We pulled back almost halfway but as you can see the participation in the move back was pretty weak. Look at how small the shift in delta was on the down move. Those new longs are not puking out.
If the bounce off the key level gave you confidence to change bias, the relative lack of participation should be another thing in your favour and then the next thing to do is find a place to get in.
In terms of where next. I expect us to balance out at some point. That may be here, it may be lower down. For sure, if we move up from here, I'd expect us to bounce off 1400 downwards and not head back to 1450+ just yet.
Still, I don't know, this is just a guess. What I do know is that at some point we will balance out and have another range to play. I can guess where that might be but there is no way I know of being sure where it will happen. I just expect it to range more than it trends.
