Don't take everything at face value

Just pulled this out from one of the site lessons:

[I]The more times a currency pair touches a pivot level then reverses, the stronger the level is[/I]. Actually, “pivoting” simply means reaching a support or resistance level and then reversing.

Read more: Range Trading with Pivot Points | Pivot Points | Learn Forex Trading

This is pure tripe. Bollox, whatever insult you want to throw at this statement most is unrepeatable for the delicate of mind.
Believe it at your peril:cool::cool::cool::cool:


I don’t see anything wrong with that statement (the one in bold type, of course), since it just repeats the well-known fact that support and resistance levels are considered to be stronger the more they have been tested without actually having been broken.

So, please enlighten me.

This is a myth, support and resisitance are no more or less than supply and demand zones. When the supply or demand is out of balance then the price will break. This is a fact, this is a fact this is a fact. What is your interpretation of support and resistance? Do you believe there is something mythical hiding in that area that is going to scare buyers and sellers away when the price reaches them?. Do you think these self same buyers and sellers then publish the terror that is to be felt when price approaches that area?
Please explain this well known fact to me because I see exactly the opposite.

There’s nothing mysterious or mythical about it. A well respected level will tend to attract more investors looking to take advantage of the possibility of another decent reaction from the demand / supply zone. Just because a level was respected before a few times doesn’t mean that history will repeat itself again as there will be different conditions in the market that maybe result in a different balance between supply and demand this time around but traders will be well aware of these potential S&R levels and will trade accordingly if they see PA reacting to the level again.

we seem to have lost one key point that price can do what ever it wants, we can only speculate on what COULD HAPPEN
so this point in the lessons is valid in context

OK I will say it another way. I personally will take a trade on the first retracement back into a supply or demand zone as part of my trade plan. I see this as a high probability trade because the price action tells me that there is a still a supply demand imbalance. When it retraces the second time I will maybe take the trade because there may be a supply or demand imbalance and there fore a stacked probability in my planned favour. The way it is portrayed is that a trader would do better to wait for the 7th 9th 12th time for price to enter and test that area because this proves how strong the level is and the probability of success is thus on the increase with each subsequent test. That my friend is poppy**** with emphasis on the final four letters.
Go checkout the daily chart on the GBPUSD , the demand zone has been hit over 7 times in the last few weeks, please come back to me with a trade plan to go long. I shall watch it with agog.