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Ira,
To generalize the concept of support and resistance can ruin trading.
If you are using Andrews lines ineffectivly you can find at least 30
lines for tomorrow.
Thats why I like the idea of there being three types of sand bars.
We have identified three different types. a) ones you can sail over,
( after prices sail over them you can put on a trade with low risk as
prices come back to the sand bar....and ride to the next sand bar)
b) ones where you need to wait for the dredger to come by. In this
case a pivot is made prior to the sand bar. Then as prices pass
through enter the trade with a stop on the other side.
and then there are c) the rocky reefs...these typically have markers
on them....Pivots you see on the chart later.
Being able to know the kind of sand bar that the prices are sailing
near is very practical because they also provide points to take
action and what kind of action to take. When there are no sand bars
or changing winds the water is deep enough for the sailors to relax
until the next sand bar or change in wind.
R
> I thank Mr. Baker for his explanation of how probabilities are
arrived at.
> In this case the ratio is 3/1. As for support and resistance. The
words
> are self explanatory. They do not say top or bottom. With support/
> resistance areas price is expected to stop there temporarily and
one should
> exit a trade at that point and wait for their system to tell them
it is time
> to re enter a trade. Whether it be trend or contra trend. Support
levels
> are supposed to be bounced off of as are resistance levels. No one
said
> that either is the end of a move. My system provides and entry
price and 2
> support/resistance price levels and a target. All I expect at each
level is
> a retracment in price and the ability to re enter a trade once
another entry
> price is given. Many times the trade is in the opposite direction,
contra
> trend, rather then with the trend. As trend is self determined,
your bear
> market may provide my bull trade and vice versa. The Nasdaq, OEX,
S&P and
> the INDU have done exactly what they were supposed to do based upon
the
> chart information. Are support/resistance levels specific prices,
no.
> They are price areas. Momentum will often carry price through a
support
> price before it returns, a spike down. Or price might not quite
reach a
> resistance area due to pressure. that is what indicators are used
for. You
> don't need a statistics background to figure basic probability.
Just take
> each trade presented by the system and add then together then
divide that
> into the number of times price has actually reached the projected
price.
> That will give you a percentage of accuracy. The more data, the
closer the
> degree of accuracy. There is a difference between probability,
degree of
> accuracy and odds. In rolling dice. The odds for a 12 or a 2 are
36 to 1
> each time you roll the dice, but each time those numbers don't come
up, the
> probability of it happening is far less then the odds. The houses
edge,
> they pay 30/1. Because heads or tails is even money doesn't mean
that you
> couldn't get 10 heads or tails consecutively and defy the odds and
the
> probabilities. The saying still holds, numbers don't lie, but
liars use
> numbers". One can make the numbers do anything they want, just
look at
> corporate financial reports. That is why TA works and Fundamentals
has its
> flaws.
>
> ----- Original Message -----
> From: "jeff97_98_1998" <jprroth@xxxx>
> To: <realtraders@xxxx>
> Sent: Sunday, July 07, 2002 7:03 AM
> Subject: [RT] Re: Bear Market ?
>
>
> > Not Joking,
> >
> > How does one compute a 60% probability of a market level
> > being achieved? And in what time period? And with
> > what amount of drawdown?
> >
> > Why not a 100% probability, given enough time?
> >
> > What is used to forecast probability?
> > I flunked statistics and probability in school,
> > so this subject is quite confusing to me.
> >
> > Also about support and resistance.
> >
> > How many support levels has the Nasdaq violated
> > since 5000? So where was the support?
> > If you breach 10 support levels, and bounce off the
> > eleventh, does that prove support levels actually
> > are tradeable?
> >
> > thanks,
> >
> > jeff
> >
> >
> >
> >
> > --- In realtraders@xxxx, "ira" <irat@xxxx> wrote:
> > > Some interesting things have occurred on the charts with
Wednesday
> > and Fridays numbers. There is nothing in price that has voided
the
> > down trend in the indexes and the rally prices are due for a
> > retracement, but I would be careful about going short into a
> > retracement of this rally. There appears to be a 60% probability
> > that the Nasdaq composite could get to 1500, the 100 to 1170, the
S&P
> > to 1050 and the DOW to 10,000. There are some strong resistance
> > points prior to reaching these numbers, but they are there. So,
if
> > you are going to short the first thing on Monday, it may pay to
have
> > a safety net somewhere. Good trading, Ira.
> >
> >
> >
> > To unsubscribe from this group, send an email to:
> > realtraders-unsubscribe@xxxx
> >
> >
> >
> > Your use of Yahoo! Groups is subject to
http://docs.yahoo.com/info/terms/
> >
> >
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