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Murphy is talking about support and resistance zones as determined often by
former lows and highs, so the following technique may not apply here, but some
traders when refering to fibonacci resistance penetration require the close of
two business days beyond the point, not an intraday penetration of any amount.
With this technique, any two closes beyond the point, regardless even if it's a
tick, counts towards penetration.
Elliott wavers, on the other hand, refer to % penetration when the fourth wave
penetrates the top of the 1st wave. With this, intraday penetration counts but
the % before an alternative wave picture is forecast can vary up to about
10%--or more.
But neither of these examples probably apply to what you're trying to
accomplish.
Mark Scheier
VonHef wrote:
> I have been reviewing my old John Murphy book "Technical Analysis Of
> Futures Market".....
> and he was teaching about using a 3 to 5 percent penetration of support or
> resistance values
> before they are confirmed to have broken. Do any of you make such
> calculations? I am
> considering using a multiple of the "Average True Range" and then
> adding/subtracting
> this value to the S/R value. For example: if resistance was at 1300 and I am
> using half of
> ATR of 20......then my confirmation would be at 1310. I like the Idea of
> using ATR to help
> compensate for volatility. What do you guys think? How do you Traders do it?
>
> Best wishes,
> Adam Hefner.
> VonHef@xxxxxxxxxxxxx
>
> ---------------------------------------
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