The Simplest Trading Method In The World

Re round numbers on indices do you look at futures price, or (for want of a better term) "spot"?

LOL I kept having bad experiences without them .

And thanks, although I doubt it will run as long as yours .

Don't get too hung up on it. For me they are just areas of significance (as you can see above, respected and experienced people disagree with me completely, which is fine and to be expected). Try drawing them on - if they help, keep them, if they don't, ditch them. Same with anything - use MACD divergence if you want, fibs if you want (don't see much point, you can eyeball both to be honest), whatever you demonstrate to yourself helps you. The key for me is not just finding "good" trades, but giving myself an excuse to stay out of "bad" trades.

Trader Dante makes a good point - what we are looking at on is trading off support and resistance. We want to build up the case as much as possible. A number on it's own is OK, one at an S/R flip is good, one at an S/R flip and a pivot point is even better, one at an S/R flip and a pivot point and a trend line with divergence etc etc etc.

This is March futures, or rather the bucket shop equivalent, which I have never had a problem with. There's no better term than "spot" for forex, but since this is indices a better term is "cash" .

Actually - Jelabas look more like this:



Good thread so far. Although you are far too uncouth.

Hi Pazienza,
I concur with DT's comment: good thread - but why all the effing and blinding? I can only assume you're a northerner.


Re. round numbers - I've always been a fan of them - as are many traders here on T2W. Anyone who follows Mr. Charts' thread will know that he pays close attention to them. However, I suspect they're a bigger deal for stock traders than they are for futures traders. Why? Because there are far more amateur stock traders / investors than there are amateur futures traders. I doubt that pros care two hoots whether they enter / exit the market at a round number or just above or below it. They get in or out because that's what they want to do and they pay little attention to the exact number - round or not. But, as you said in your OP, this is just my view and it doesn't in any way negate your basic argument, which is well explained and as simple as you promised it would be. Good thread - keep it up!

Tim.

hi Pazienza,

having established your method, are you going to expand upon:
1: the risk you apply to each trade, ie, is the stop loss (should you use them), beyond the tip of the pin?
2: how you quantify the amount of return from the trade? (do you have fixed, or dynamic methods of knowing the move is exhausted)
3: do you trade bigger if the RN pin is also coincident with a weekly or monthly strength RN?
4:One comment you made was to "forget the move went 5R"; do then take all your profits in one go? ie, no scaling out in case of big runs?

thanks

Fascinating thread – a system so simple that you’d be too busy trying to think of something more complicated to notice that it’s right there staring you in the face!

I’ve done some quick, visual back-testing of this on various charts and it seems to be spot-on! It’s so easy to spot once you’re ‘thinking simple’. I’m now seeing loads of support and resistance at, or very close to, big round-numbered prices, and some pretty clear price action where the big reversals take place – You don’t even need to start drawing on the chart – it’s all just there staring straight back at you.

As Trader Dante points out, S/R levels aren’t always exactly at the big rounded-numbers, but what I have observed is that, mostly, S/R occurs sufficiently close to those ‘rounded’ prices that you could easily consider those prices as the centre-points for a slightly wider S/R ‘zone’ in which to look for definitive price action.

I’m not one for buying into the concept of there being a ‘holy grail’, but this is as close as anything has come to confirming that such a thing could exist!

Thanks to Pazienza for sharing!

Get in quick then Mitch - 1300 S&P is just around the corner...