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Mark,
Thanks for the reply. Actually you are dealing with the exact scenario I am
asking
about. I have been analyzing the "Gann-Swing" method that has been posted to
the list.......there are many things I like about it, but one thing I don't
like is that
Krausz only defines two trend directions (up or down), when in reality the
market
often moves sideways. Since this is a trend following method, you really
shouldn't
trade (with this method) in a "Trading Range" market. So I have been going
over ways
to define (logically) what a "Trading Range" is and just as important.....
to define
when the market has broken out of this "Range". That is where I first came
with
the idea of adding/subtracting ATR to the previous high/low of the trading
range
as to not signal a false breakout of the range. I suppose a 2 day rule could
just
as easily be implemented (into this mechanical method).......but I have also
seen
large moves happen in two days. Perhaps a combination of both?
Best wishes,
Adam Hefner.
VonHef@xxxxxxxxxxxxx
---------------------------------------
----- Original Message -----
From: Valhalla <scheier@xxxxxxxxx>
To: <metastock@xxxxxxxxxxxxx>
Sent: Monday, May 03, 1999 7:20 AM
Subject: Re: Support or Resistance Penatration question
> 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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