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Here is another view of something similar to John's S/R trading method. For
example, in the attached chart the 1114 and 1106 levels contain 70% of the
previous day's tick volume as calculated by Clyde's Market Price
Distribution tool. If the snp opens withing 1106 and 1114 then sell at 1114
and buy at 1106(with appropriate stops of course) within the first third of
the session. As the day progresses the newly developing price distribution
takes on more importance. If 1114 fails to hold as resistance the first
sell gets stopped out, then buy a retest of 1114 and target 1122. The
inverse strategy is used at 1106. Trending trades can occur if those two
levels are broken. The problem with this plan is the concepts depend so
much on the bar time and what is determined to be a successful pass or fail
of resistance or support along with diligent use of stops. For example,
what constitutes a failure of resistance?.. a close above it on 5, 10, 15,
30 minute bars? A close and an open above it? A clear bar penetration so
that the low of the bar is above it? And then what about the stop? How
does one determine how many points above the R level to put a stop on the
short, or how many below the R level for a long if the R level doesn't hold
resistance? Additionally, suppose the snp opens above the R level or below
the S level. MPD theory says those levels then become S and R respectively
and are to be bought and sold respectively. One fly in this ointment is
that the value are pivot at 1108.50 is a strong attractor for a retest of
Monday's action. Sometime Tuesday it should be tickeled a bit, how is that
for trading terminology. Personally, trading off of specific levels could
be improved on by use of swing points near those levels in order to
incorporate more of what the mkt is revealing about itself. So rather than
take specific R/S levels I would look for the nearest swing points to R and
S to trigger the signals. PS: The chart was made about 5:30 PT or an hour
before the NY open. Globex is thoroughly testing that 1108.50 level now.
have a good day,
bobr
----- Original Message -----
From: "John Cappello" <jvc689@xxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Tuesday, April 23, 2002 5:06 AM
Subject: [RT] S and R trading method for S&P
>
> R= 1112.6 S= 1104.0
>
> If market opens between these ranges, Sell at R or Buy at S whichever
> is struck first.
>
> If market opens outside this range, enter only if this range re-
> entered and Sell R on a stop and Buy S on a stop.
>
> 4 point SL and 6 point profit target, MOC...discretion optional.
>
> John
>
>
>
>
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>
>
>
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>
>
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