As far as TA v FA is concerned, if you never bring it up, then I won't either. FA's are not even a part of my consideration in trading. I never talk about them even in my thread.
Eventusally, I'm going to do a series on my S&R's in my thread, just to show the tradeability of them. (I guess I am not impugning on the originator of this thread by saying that seeing he hasn't showed up since his original post.) I did a 5-part series on them in my blog-- 4xpipcounter.blogspot.com in circa Nov 2007. for now , let me cut to the chase.
My S&R's are proprietary, adn highly effective. The blue lines are the dailies, red--weeklies, and the yellow-- monthlies. I also have the yearlies and decade's, but that is a story for another day. The S&R's are figured before the TF begins. In other words, The S&R's for the weeklies are done on Sunday, therefore, it is not hindsight, nor is it ever possible for them to repaint.
A cursory view of the chart I attached, will show there were bounces off the lines and continuation processes. The simplicity of my S&R's is this. Using the weeklies as my example, use the hourly chart in viewing them. The rule is that when the hourly candle approaches the red line (weekly), a correction within that process takes palce. Measure the point it hit and the previous reference point, adn then take 38.2% of that, and that will be the minimum correction. In the rare event there is a minimum bounce, then look for a move on the other side of the line. Once there is a pullback, to the red line, that is the time to enter the position for a move to the next one. I took a small but quick short on cable last night based on that principle, but it was on the daily.
The difference is with the weeklies, the 4-hour candles would be plotted to monitor price action in that same regard. With the dailies, it would be the 15-min chandles, but there is one additional aspectr involved with them that I could explain, but that is the meat and potatoes of my S&R's. I make the levels, not the formula available for anyone who wants them for a partiuclar pair, just so they can see them in action.
One of the things that authenticates what I do is that I show things as in forward looking, not in the rearview mirror, like many technical discussions revolve. You know how it is, People will exclaim as they are looking at a set of charts, "Wow! Nice trade!" Then, after questioning, you find no one actaully executed the trade. It's all rearview mirror stuff. It's necessary to see what is happening in the future in order to execute a trade in order to make the pips. Not taking my bows or trying to act smug, but that's what I'm all about.
BTW, you made a good point. All the lines, within their TF's are evenly spaced, except the extremities. The labels I have are are D,W,M; R, S; 1,2,3. WR3 would be the 3rd weekly resistance. The 3's are always the extremities.
I like this comment, "what you would deduce (in advance)". Name 3 pairs, and I'll give you my weekly levels for them, and I will post them about 2:00am GMT on Monday. Afterward, plot them on your demo chart, and then enjoy watching the action.
Hi - I see about 12 (almost) evenly spaced lines on your chart - if I wipe all the candles, except (say) the first few, I would find it extremely difficult to deduce anything from those S/R lines about the actual path subsequently taken. There are a lot of lines - as time passes, some are crossed, some are rejected.
I might hypothesise that the longer price rises/falls, the more likely it is to reverse, but to me that is just one very basic economic argument.
So, whether or not it is technically a random walk, the path still appears random to me.
I am genuinely interested in what you would deduce (in advance) from the S/R lines on this chart - and let me stress that I absolutely do not want to initiate a TA v FA discussion!
