price driven strategies

[Christiaan]

I've seen a few price driven strategies and I'm not paticulary impressed.Yet there is one system that the guys from the trading academy trades some of which used to work in the "pit".All they use is support and resistance.

When prices reaches a area where their is more supply than demand aka resistance they sell.They don't use indicators so my question is this apart form candlesticks forming reversal patterns like the shooting star and hammer what indicators can you use to try and avoid breakouts?

 

[TheBramble]

Christiaan, please check out a chart and instead of looking for hammers and shooting stars which confirm a change (?) of trend, find the ones that don’t…Look for disconfirmations…not confirmations. It doesn’t always mean what the textbooks say it means. They’re about 50/50 from my experience.

Support and Resistance is more likely than not to hold. Depends on how often it’s been tested and the manner it’s being tested at this point in time and the time of day and the instrument.

Major, powerful thrusts through S/R are less likely to be sustained than tentative probings leading to a gradual change of S to R or R to S, although, sometimes a big thrust through will maintain momentum. Go figure.

If you’re into breakouts (which are good things to trade) make sure your vol is constricted and the price consolidating, position yourself with a bias to the direction that brought you into the consolidation range, but a willingness to switch. You can be cautious and insist on a retrace and test or be massively impetuous and just hit the channel boundary breach +/- the magic factor.

Avoid breakouts? FM, trade the beggars….

 

[counter_violent]

Here's One i'm currently in from 4,367

 

[counter_violent]

Does it get any easier than this !

75% Closed out @ 4,302...see what happens with price for the rest.

 

[counter_violent]

Covered remainder @ 4,273 ....is it bed time yet !

 

[willfx]

Candle patterns aren't the only thing one should look for at SR levels, also important is what price was doing prior to the attempted breakouts; the momentum of the move and if perhaps there was a pullback just shy of the attempted breakout. Once price has reached a level we should consider:
Time spent at that level, The number of prior touches(potential strength), (Relative volume at the swing), the age of the SR formation, the prior momemtum before the test and the overall trend. Also consider the confluence of one or more signals, as well as including horizonal support levels consider touches of trendlines, fib retracements/extensions etc.
There's no sure way to avoid the breakout, as your title suggests you have to look at what price is doing at that exact moment in time once the level has been tested or penetrated. These things i've mentioned might initially give us an idea of how price is going to act but there is no sure of way of predicting what price will you, you just have to be ready to act. If you give an example I can be more specific but I think ultimately you're looking for an answer that isn't there because at best we can only ever say a level "should" not "will" hold based on prior action.

 

[fxmonk]

I've seen a few price driven strategies and I'm not paticulary impressed.Yet there is one system that the guys from the trading academy trades some of which used to work in the "pit".All they use is support and resistance.

When prices reaches a area where their is more supply than demand aka resistance they sell.They don't use indicators so my question is this apart form candlesticks forming reversal patterns like the shooting star and hammer what indicators can you use to try and avoid breakouts?

And why would you want to avoid breakouts?

 

[captaincol]

Counter Violent, that's excellent to see your trading straegies in progress. Being a breakout trader myself (mainly on currencies, although when I was living in Melbourne I used to trade the 200 badly), I was wondering what your exit strategy is? I have been using average daily move to give a target price. I also dabbled in trailing stops, but these seem to only work on trending days due to whipsaws.