NO trade zones

Sorry for making a another thread but what do most of you consider a no trade zone? If price is close to a S&R and you get a signal should wait to see if it either breaks or bounces off of this or is it usually ok to enter? Thanks!

Adam

I would definately say don’t trade during times when the large market data releases are coming out and they are quite influential. For instance last week the japan interest rates came out, and the market was indecisive before the release. There was heavy buying, and heavy selling, all in all they ended up raising the rates, it moved the market down like 80 pips, but continued upwards right after. As far as support and resistance go, I can see heavy buying/selling for it to break through or to keep it from touching. But based on what currency pair(s) you use check to see what happens in the past when they come around these points, it might give you an idea of what to do. With experience on the pairs, you tend to get a feel for what they do based on their history. And the larger the time frame the sronger they say tend to be. For instance the EUR/GBP right now is close to a decent sized resistence point, if it breaks through it’s possible it could continue, but just as likely to go down. But, you have to learn if you are comfortable with the idea of trading around these areas. For me, I just focus on taking my signal and keeping it, until the trend seems over, resistence/support points or not. Then again I’m not into resistence/support points all that much. Hope this helps a bit, Actually I just posted a response so you might get a better answer and more views!

Stay Cool, Take it easy!

Shadow,

Thank you for your insight. I have become use to using S&R’s for better determining entry and exit points. I just get a bit boggled when you think you have a break of that resistance/support but turns back out of your favor. I have tried to study my pairs to see how much of a break they need to to continue the expected trend. I just question sometimes my ability to drawing correct S&R’s. But thank you again and hopefully I will get some other views.

Adam

Well… after yesterday chewed me up and spit me out, I’d have to say I now consider big news days no trade zones. I’m going to watch for those from now on and possibly completely avoid trading on those days.

It’s weird. I had profits Monday and today, but Tuesday was killer.

I’m sory if it sound stupid, what is S&R :smiley:

Sorry for making a another thread but what do most of you consider a no trade zone? If price is close to a S&R and you get a signal should wait to see if it either breaks or bounces off of this or is it usually ok to enter? Thanks!

So, you’re trying to figure out when the general conditions dictate a “no trade zone” specifically when your system generates a signal, not just in general? For a discretionary trader, a decision on the spot is not so clear cut when prices are bumping up against S/R areas. I know the feeling. No one knows if a breakout will fail or succeed. That’s part of the risk.

On the bright side, there some secondary gages that may give you more confidence in deciding what to do. As a disclaimer, I have no idea what your system is or in what time frame you trade. I assume that you have tested it, and it works well enough that you have a positive expectation. (duh. sorry…you just never know.) If I’m repeating things you already know, I apologize in advance.

Try the simple things like confirming your signals across more than one time frame. That is, if you generate signals on the 15m period you should be confirming the trade direction against a longer period (1h or 4h, perhaps). I find it especially useful to look at overbought/sold conditions on the longer time frame. By getting a better feel for the strength or weakness of the pair on the big picture I can form a better opinion as to whether the S/R is likely to hold in the short run.

I also want to be aware of big round numbers, long term trendlines, and long term fibs. Sometimes those sneaky things don’t show up visually on your short term charts. Once again, no one knows for sure. There are no hard and fast rules. It sounds like a lot to think about, but once you get out on the pitch, you get up to the speed of the game.

Shadow and Genghis mentioned their aversion to trading during news events. I agree entirely.

Have you tried scaling in to your full position? In trading, it’s difficult enough to hit the target. It’s near impossible to shoot bulls eyes every time. Enter with a portion of your total size. Add to it if the trade begins to work.

I have tried to study my pairs to see how much of a break they need to to continue the expected trend. I just question sometimes my ability to drawing correct S&R’s.

I know what you’re saying here. Many traders wait until a bar closes above/below the high/low of the breakout bar before entering.
S/R numbers are well known and readily available on the web. No need to guess.

Thanks for letting me ramble. Good luck with your trading…

Adam,
I am trying to stay out of the market and looking for a reason to enter. So, it is more like no trade as a default and trade when the system gives out a signal. my hypothesis for S&R is that the level will hold and then if it breaks ( a close beyond), I may enter due to the situation.

Thank you guys/gals for your answers. To me the biggest problem is jumping the gun or getting in too late. I guess that would be everyones problem in the world of trading but no one can be perfect in this I know. When I draw my S&R’s, I like to use the high points/ low points and If I see other candle wicks connecting to this point I have confidence as to a strong area of S&R. Then comes to the problem with me as to when price approaches this area again. Now most know that a majority of the time when a strong S&R is broken it rallies. Okay, well consider my S&R line is connecting the tops and bottoms of areas where the wick connects but the area does not connect at the same price. Meaning I can move the S&R up or down a little and the two wicks of the candles will still be connected to the line. Do you consider this a “no trade zone” because if you have it lower and you consider a 10 pip close break rule on a lower time frame, that whole area can be considered a possible turnaround. So where would you know to start your 10 pip rule analysis, correct?

I have started trying to wait for it too break and retrace back, but sometimes when it hits then shows a turnaround candle and signals to be a possible go sign, it will retrace some more and then shoot back. These areas I have been talking about have been killing me. I either get in, and lose pips because it continues to retrace and then shoots toward and pass my entry by just a little bit or I jump in too late and the trade is gone. Anyways enough of this rambling. Thanks again for this help. More is welcomed. :slight_smile:

Adam