Price Action and Support/Resistance?

Beginner Questions
1

Hi,

I am currently going through some Price Action courses and tutorials. These PA guys/girls talk about having clean charts without a lot of indicators. But they also talk about S/R levels and zones, fibonacci retracements, using MAs as dynamic S/R, pivot points…

What I don’t understand is: which ones should I use and when? I personally like using MAs as S/R levels/zones. But if I add MAs, fibonacci, pivot points and all other S/R tools…this is not a clean chart.

How can I know when I should use which S/R tools?

As I can see, MAs are more than enough and they can work pretty well in combination with different candlestick patterns.

2

you don’t need tools, to see support and resistance

the price shows support and resistance

swing high means resistance, and swing low means support

if the same area has swing high or swing low more than once, this is stronger resistance or support

the more times an area has been resistance or support, the better the chance it will soon be resistance or support again

it’s simple, and you don’t need indicators for it

moving averages don’t tell you support and resistance as well as the price tells you this

3 Likes
3

Technical analysis can not have strict rules, because if market was subject to certain rules everybody would try to benefit from it and this advantage would disappear thanks to Efficient Market hypothesis.

TA and price action is all about testing different patterns on history and trying to apply it on current trading with wise risk-management.

4

Yes, they are not that good but they can still be used as S/R…an it works well :wink:

5

That’s why I’m starting to realize that PA is much better than some MA crossovers or custom made indicators. The market changes all the time and the only thing that shows you how does the market behave is the price.

1 Like
6

Price is king. Indicators and ma’s are all functions of price in one way or the other.

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7

This is right.

This is very, very wrong.

8

Obviously you never used Dynamic Support and Resistance

9

PA is also about discovering patterns. Similarity in mechanics of analysis is huge.
You’d better to progress in the direction of information asymmetry. As trading decisions are made with all available information to present time+ expectations (rational expectations theory) you may gain edge trying to digest fundamentals as much as possible and make decision before the crowd (as big money has different R/R, i.e. risk level matters more), while you are more flexible in this term.

Good luck.

1 Like
10

U really need to look alot at the chart Inorder to learn price action. It really takes time and experience.

11

having indicators on the chart is a handicap to learning price action, better not to be distracted with this

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12

So you want to say that you trade naked charts? Do you manually draw S/R levels? Do you use fibonacci or pivot points?

13

You should use all of the different indicators such as Fibonacci, MAs, and pivot points as well as support and resistance levels. Where there is an overlapping of some of them, there are the significant zones.

14

Thats rubbish and you know it.

2 Likes
15

This is very, very wrong.

It’s terrible, to see such rubbish posted here as “advice”. :dizzy_face:

1 Like
16

G, that was my Großvaters first name. Anyway, while I appreciate your membership and participation here, you are mistaken, your theory is not well founded. For example, if I may, do you have any statistics that would confirm what you said was true, and some examples? If not, I strongly disagree with your statement.

The Ever Disagreeable VIPER

17

Suppose we best not take the mickey without answering the OP’S original question.

Thing about PA is it’s about what you want it to be. It’s subjective and discretionary. Price and price alone is all that matters. Actually price and time. What is the price now, what was the price then, what did the past teach us about that. Probably the easiest PA structure to study this concept is the heads and shoulders pattern.

Because of the concept of PA, indicators are not warranted. However I think every trader has a personal favorite which they apply to their chart. The use of multiple indicators however is contradictor to this as the concern is no longer about what the price is however how statistics can graphically represent price.

All the best bro, ask away if you have any more questions.

1 Like
18

So, the way I trade is to use trendlines and S/R lines (draw them manually) and MAs as S/R levels. Is that OK? Here is the example of a trade i would take:

image.png1538×774 41.6 KB

The price nicely bounced of the 50EMA.

19

i do not use naked charts

i think having indicators on the chart is a handicap to learning price action, not to using price action after learning it

i draw S/R levels from the price, always

i can see S/R easily from the price, these terms are defined by the price, indicators are not needed to see S/R!

if someone is using indicators for S/R then he does not mean the same thing by “S/R” that i mean

i don’t use Fib or pivot points myself, i looked at both a lot but did not find them helpful, i find S/R very helpful

2 Likes
20

There’s no other way, really.

To depend on indicators to show you support and resistance is a nonsense, when the price shows it so much more clearly and directly anyway. As has been said so many times, that’s like unnecessarily driving your car in reverse everywhere and steering according to the view in the reversing mirror. Just nonsense, really.