# Support Buying



## lukeaye (5 October 2009)

Hi guys, 

I'm a big fan of support buying and i have a number of rules associated with this sort of trade.

I am no whiz at creating amibroker codes or anything like that so i havent backtested this theory to the best of my ability.

What i would like to know, as i think it would be of great benifit, is;

What sort of expectancy would a sp have of rallying off support into a breakout, relative to the amount of times that support line is honoured.

From my way of thinking, a sp should be honoured off a particular price with high volume, meaning there are a lot of buyers or somebody with a lot of money buying at this point. But at some stage, surely if the price keeps getting sent back down from resistance, there will be an exhaustion on one side. Either, we will run out of buyers, or run out of sellers, hence a breakout.

How many times can a price be supported to give us the greatest expectancy of an upside break? Is it when the price is supported 3 times? or 10 times? 

Because of my newbiness with amibroker, i havent been able to examine these sort of results over as many stocks and time periods as i would of liked.

Has anybody else done this? or does anyone know how to write a script for it?


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## lukeaye (5 October 2009)

This also leads me to another question, when a sp is rejected from a point of resistance, what does it do to the expectancy of a breakout with each rejection? Do we have the greatest expectancy buying from support after the price is rejected once, twice three times or ten times?

Once again i wish i knew how to ask amibroker this? does anyone know how, or has anyone done it and has results? 

All i have really, on this topic is heresay and small sample data i collected maually, but i would like to test all stocks over the last 30 years. From what i have read and been taught, the greatest expectancy is after one price rejection, then its slides after two, then on the third our expectancy drops double. But i would love some hard data/evidence.


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## nunthewiser (5 October 2009)

Support and Resistance trading is my bread and butter 

i do NOT use amnibroker

my strategy involves the use of tight stops with low % losses on MY defined stopout points on MY perceived break of support/ressistance 

my capital position size varies in accordance to the % in which it takes to hit MY stoploss point 

i often trade channels (long and short) and will skim part OR fully exit position at top of MY percieved channel dependant on volume and actual watched action with another entry to top up or re-enter on break of MY perceived channel 

if the trade goes the wrong way on me i will exit full position on break of MY perceieved stopout point 

i am happy to be wrong on the direction my trades take ....... 

pretty basic stuff from me posted and there is a heck of a lot more to it INCLUDING basic fundamentals on what the company is up to at the time , i dare say one of the more "knowledgable " people here can type it a lot better than i 

it works for me , it may not work for you


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## lukeaye (5 October 2009)

Hi nun,

thanks for your input. I already have established rules for trading support plays, 7 in total, each with its own weighting to give a total score for each support play im looking to trade.

What im interested in, is data, evidence of what an expectancy can be for what i mentioned above.


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## motorway (5 October 2009)

Also give some thought to buying a break of obvious support

large quick moves come from one-sidedness

A real overbought or oversold situation
Can be where real strong trends start.

You also have to give some (a  lot of  ) thought how you would do this
When you would do this and ( --> Muti Scale analysis ?)

And how you look after risk
So as to get the reward...

Every time the price trajectory changes
IS Support and Resistance

motorway


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## nunthewiser (5 October 2009)

motorway said:


> ?)
> 
> And how you look after risk
> So as to get the reward...
> ...




amen

hence why i say ..........MY percieved support/ressistance points 

thankyou motorway


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## Mr J (5 October 2009)

> Support and Resistance trading is my bread and butter




I might even say that it is all that matters to me, or at least all that I use. All price does is ping pong between S&R.


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## lukeaye (5 October 2009)

motorway said:


> Also give some thought to buying a break of obvious support
> 
> large quick moves come from one-sidedness




Do you mean shorting if support is broken?

If not then possibly there is a greater reward, but also much greater risk, with a lower probabilty of being right? not my cup of tea.

A break off support may start an acceleration in price (momentum). buying against momentum is not what i would look to do. Especially when there is a real risk that momentum could quite easily continue in that direction


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## nomore4s (5 October 2009)

motorway said:


> large quick moves come from one-sidedness
> 
> A real overbought or oversold situation
> Can be where real strong trends start.




This has been shown by the market in the last 6-12 months - look at the rally we've had off the bottom. Been a very profitable opportunity for those that could identify that the market was oversold and then have the foresight to enter the market at that time.

Being able to identify these conditions is the trick.


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## lukeaye (5 October 2009)

nomore4s said:


> This has been shown by the market in the last 6-12 months - look at the rally we've had off the bottom. Been a very profitable opportunity for those that could identify that the market was oversold and then have the foresight to enter the market at that time.
> 
> Being able to identify these conditions is the trick.




Unfortunetly i know of no technique, and nobody who can succesfully do that? (apart from hindsight)

How many times would you lose trying to pick the bottom? are you not better off buying off the pullback of a new trend?

have a look at some of the big companies like citgroup, $55 stock was showing oversold conditions at $45, 40, 30, 20, 10, 2. try to pick that bottom? id rather go with momentum to be honest.


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## Wysiwyg (5 October 2009)

I read about trading breakouts of both horizontal and angular resistance. Why??? An entry at support could be much more advantageous. If support is breached then vapourise. If a bounce off support follows through to a breakout of resistance you can sell to the breakout confirmers.


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## motorway (5 October 2009)

lukeaye said:


> Id rather go with momentum





YES YES YES

BUT

when are you looking

I look at the down momentum when looking to go long
When a move down is extended and momentum goes to ZERO
a better word and what most people mean is Velocity

when velocity goes to ZERO
Acceleration is already maxing out 
IN THE OTHER DIRECTION

This idea is very NEW

But also very OLD

Shake-out ,Springs , Pole reversals etc

The NEW versions have more fancy theory

FRANK D  should have some comments on this too I think


Just because there is more reward
DOES not mean there is more risk
there could very will be less

*IE PEOPLE ARE NOT RATIONAL
*
That is why we use charts for only *1* reason

I'd rather go with momentum TOO

* --> Muti Scale analysis *

Different groups acting in different ways
except at extremes
These extremes are the ones that make the $$$$
and initiate TRENDS

motorway


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## nomore4s (5 October 2009)

lukeaye said:


> Unfortunetly i know of no technique, and nobody who can succesfully do that? (apart from hindsight)
> 
> How many times would you lose trying to pick the bottom? are you not better off buying off the pullback of a new trend?
> 
> have a look at some of the big companies like citgroup, $55 stock was showing oversold conditions at $45, 40, 30, 20, 10, 2. try to pick that bottom? id rather go with momentum to be honest.




There were people that did identify the market was reaching a major bottom and that there was going to be a very strong rally, some of this analysis was posted in the XAO thread by a number of posters.

You don't have to pick the exact bottom, you can wait for confirmation and buy on a pullback but you still need to be able to identify that a new trend is developing and the up move is not just part of the existing downtrend.


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## lukeaye (5 October 2009)

motorway said:


> YES YES YES
> 
> BUT
> 
> ...




very very interesting, let me ponder this a while.

And as to my questions can anyone help me in this area?


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## nomore4s (5 October 2009)

lukeaye said:


> What sort of expectancy would a sp have of rallying off support into a breakout, relative to the amount of times that support line is honoured.
> 
> From my way of thinking, a sp should be honoured off a particular price with high volume, meaning there are a lot of buyers or somebody with a lot of money buying at this point. But at some stage, surely if the price keeps getting sent back down from resistance, there will be an exhaustion on one side. Either, we will run out of buyers, or run out of sellers, hence a breakout.
> 
> How many times can a price be supported to give us the greatest expectancy of an upside break? Is it when the price is supported 3 times? or 10 times?




Just to get back on topic a bit.

I'm not sure if you will find a correlation between the number of times support or resistance is tested, you may but I think it will vary from stock to stock and set up to set up.

But what you might be able to find is some sort of indication that one side is nearing exhaustion. Alot of Wyckoff (and VSA) is based around identifying this exhaustion of either the buyers or sellers


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## motorway (5 October 2009)

nomore4s said:


> Just to get back on topic a bit.
> 
> I'm not sure if you will find a correlation between the number of times support or resistance is tested, you may but I think it will vary from stock to stock and set up to set up.
> 
> But what you might be able to find is some sort of indication that one side is nearing exhaustion. Alot of Wyckoff (and VSA) is based around identifying this exhaustion of either the buyers or sellers




Price trajectory can tell YOU
Volume can Tell you

& Time ( the duration of the moves ) can tell you

The three together ?

eg PRICE

When a move of x% occurs , then on average
The price will continue to move another X% before it reverses

OK If it moves more or less
and you keep a running score through
the congestion area or trend area

You have a indication on which side is stronger in its activity

These are the  * upside/downside failures  *

Ok faster slower
more volume or less
 etc

also position  where is the activity in relation to pivots etc

The number of times
= the work required to exhaust one side



motorway


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## Mr J (5 October 2009)

Wysiwyg said:


> I read about trading breakouts of both horizontal and angular resistance. Why??? An entry at support could be much more advantageous. If support is breached then vapourise. If a bounce off support follows through to a breakout of resistance you can sell to the breakout confirmers.




I completely agree. If the situation is good, I think waiting for 'proper' confirmation gives up too much profit potential and requires too large a stop for the boost in probability that it brings. By the time it is 'confirmed', the early entries are running nicely, even if it reverses soon. Those who waited need the trade to move that much more. I would rather get in early or wait for a retracement (which may never come), rather than entering at 'confirmation' and possibly getting an average to poor price. 

Something else I like to consider is my behaviour relative to the market. As a trader, I feel I have to think of myself as a predator, and that I have to be in a favourable position relative to other traders. If I wait and act when they do (at 'confirmation'), all I am doing is running with the herd. I am exploiting the herd if I can time it correctly, but I am betting that I can handle the position better than they can. If I enter early, I am anticipating the reaction of the herd, and am a step ahead of them the entire time. If I enter very late (at a retracement), I am preying on the weaker of the herd (those that got stopped out or exited prematurely).


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## Kryzz (5 October 2009)

So the majority of people would prefer to buy at the first box rather than the second? I guess some would argue one would be sacrificing probability for R:R? Risk reward obviously more important though, whatever can be done to improve this is always a positive i guess, if that comes in the form of an earlier entry so be it.


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## nomore4s (5 October 2009)

Kryzz said:


> So the majority of people would prefer to buy at the first box rather than the second? I guess some would argue one would be sacrificing probability for R:R? Risk reward obviously more important though, whatever can be done to improve this is always a positive i guess, if that comes in the form of an earlier entry so be it.




This is were you need to be careful imo. In hindsight the first entry is clearly the best but how many trading plans would have allowed for that entry not to be stopped out before the breakout at point 2? Trading off the hard right edge is a lot different to curve fitting ideal entries and exits in hindsight.

If you got in at the first box on your chart at say $15.50, price rallied to resistance at $17ish and then fell back to around $15.80. I guessing not too many traders would have held a declining stock for over a month as open profits evaporated.  So even buying at point 1 you could very well have captured less of the trend then buying at point 2 - depending on your exit plans and re-entry plans etc, etc.


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## Wysiwyg (5 October 2009)

And how many stocks have rallied strongly since the Markets hindsight low in February/March?


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## Mr J (5 October 2009)

The majority get in at the second box.



> I guess some would argue one would be sacrificing probability for R:R?




I do, because I believe the R:R gained outweight the probability lost. On the flipside, waiting for 'confirmation' sacrifices R:R in favour of probability - or so many think. By waiting, the trader may actually be making a lower probability trade. The longer we wait to get into a trade, the more likely we are to experience an uncomfortable retracement. Getting in early gives us room and options. If the move works out a little as planned, the early entry will do okay no matter what happens. Those who entered late need a far more significant move. So, I would argue that while the early entry is initially a lower probability trade, it becomes a higher probability trade as it plays out.



> So even buying at point 1 you could very well have captured less of the trend then buying at point 2 - depending on your exit plans and re-entry plans etc, etc




Anyone who got stopped out at 1 was treating S&R as a thin line, not as an area. There were other entries, such at the end of #1, and the later higher low. We may very well have missed it, but I imagine good traders are prepared to miss trades. I do know that the best traders were in before the break.

Something else to consider is the entries that a faster timeframe would have allowed. That final move up to the break was a trend on a faster chart, on those riding it could have held on to see if it broke.


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## nomore4s (5 October 2009)

Mr J said:


> Anyone who got stopped out at 1 was treating S&R as a thin line, not as an area. There were other entries, such at the end of #1, and the later higher low. We may very well have missed it, but I imagine good traders are prepared to miss trades. I do know that the best traders were in before the break




My point was purely not to get sucked into curve fitting an entry on a chart in hindsight.

The best traders were probably in at under $13

Now let's try to get this thread back on the topic of Luke's original questions



lukeaye said:


> Hi guys,
> 
> I'm a big fan of support buying and i have a number of rules associated with this sort of trade.
> 
> ...


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## tech/a (5 October 2009)

Look also at breaks of Resistance by a gap even on low volume.
Low volume breaks are often longer lasting than high volume.

Low volume tells more than high volume in certain circumstances.
Everyone gets caught in the high volume hype, when in fact its often saying something,quite contrary to expectation.


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## lukeaye (5 October 2009)

Can we please get back to my question? im not debating the best place to enter? do that in another thread.


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## Kryzz (5 October 2009)

Were you looking to create an automated system (in amibroker) for support buying or just scans to bring up stocks of interest? Seems like there are plenty of turtle style breakout systems (short inc) coded in amibroker, suppose one could reverse engineer it to simply go long when a short signal came up, as there would be a perceived support level reached/breached? Coupled with other volume filters etc.

I thought the thread title was support buying? How would discussing entries at support levels be deemed off topic?


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## lukeaye (5 October 2009)

Kryzz said:


> Were you looking to create an automated system (in amibroker) for support buying or just scans to bring up stocks of interest? Seems like there are plenty of turtle style breakout systems (short inc) coded in amibroker, suppose one could reverse engineer it to simply go long when a short signal came up, as there would be a perceived support level reached/breached? Coupled with other volume filters etc.




Well i would like to be able to test the expectancy of buying off a support point that is supported from as little as once up to whatever the largest time a point has been supported, to see if there is a correlation between how many times a point is supported and a likely break in that direction.

So i guess it would have to be backtested, which means it would have to be a buy script, not explore


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## lukeaye (5 October 2009)

Perhaps i should explain my thinking a little.

Here is what i am thinking.

A stock finds support why? There is a mutually agreed purchase(valued) point amongst buyers for the stock. Now one of two things are happening at this point.

(1) there is only a limited amount of buyers who will want to own the stock, so by hitting support more frequently, more buyers are taken out of the equation, therefore less likelyhood of a break to the upside, or less movement in that direction.

(2) there are many buyers, and limited sellers, so when support is hit, the sellers are washed out of the market, and much higher prices are now achievable.

So from this obviously we can deduct, that probably the most important indicator in these situations is volume on price levels? We would like to see more volume at support and less volume at resistance, and less momentum down to support.


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## lukeaye (5 October 2009)

Therefore, there has to be a correlation between the amount of times a support or resistance point is hit, relative to volume at these levels, and with this an expectancy of prive movement, in that direction, and an expectancy of a breakout occuring.


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## tech/a (5 October 2009)

No tested stats from me.
But dont agree with your logic.
Well not entirely.


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## lukeaye (5 October 2009)

Im just thinking out loud, i dont know if im right or wrong.

please share your thoughts tech


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## nunthewiser (5 October 2009)

is a great believer in the K.I.S.S system 

it applies well with support/resistance trading


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## tech/a (5 October 2009)

lukeaye said:


> Im just thinking out loud, i dont know if im right or wrong.
> 
> please share your thoughts tech




Support will either stay or go depending on Buyers OR sellers.
Rather than being seen as desirable constantly finding support at a level may well dry buyers up and sellers will need to sell lower to find buyers.

And sure sellers may well be absorbed by buyers after repeatedly hitting a support level and price moves up.


The trick is reading whats happening in volume and range.
This may not be apparent in the time frame your trading and maybe better seen in a lower or higher time frame.It may not become clear in a single bar or in a bar at all.
I'm sure Motorway would suggest that P&F charting would give a better representation of S&R.


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## Mr J (5 October 2009)

lukeaye said:


> Can we please get back to my question? im not debating the best place to enter? do that in another thread.




I'm sorry you're interested in preventing good discussion. Your original question cannot be answered in the way that you intended, and the discussion was certainly related to what you are looking to do - trade support and resistance. Asking how often support is held is like asking whether the Pope will live to next year.



> A stock finds support why? There is a mutually agreed purchase(valued) point amongst buyers for the stock




It finds support because buying pressure equals or exceeds selling pressure. In no way does it mean that buyers agree on value.



> there is only a limited amount of buyers who will want to own the stock, so by hitting support more frequently, more buyers are taken out of the equation, therefore less likelyhood of a break to the upside, or less movement in that direction.




On the flipside there is a limit amount of sellers, so hitting support more frequently will take sellers out of the equation, leading to less probability of a break to the downside. Both of these views are wrong.



			
				tech/a said:
			
		

> Support will either stay or go depending on Buyers OR sellers.




And of course many buyers are sellers, and sellers are buyers.


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## Wysiwyg (5 October 2009)

Mr J said:


> It finds support because buying pressure equals or exceeds selling pressure. In no way does it mean that buyers agree on value.




Good point, though everyday there are multiple trading instument charts with a support zone established and adhered to by buyers agreeing that it is a support zone. I will buy in the support zone and sell in the resistance zone. 

If there was no agreement to a buy and sell within a certain range OR at a certain place then the price action would be sporadic and ill-defined. Like a splash of paint on the wall.


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## Mr J (5 October 2009)

Enough sellers have to agree it's a support zone, and since all trades have entries and exits, we're both buyers and sellers.



> If there was no agreement




There doesn't need to be an agreement. It may be a tug of war that isn't going anywhere.


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## Wysiwyg (6 October 2009)

I suppose identifying `support` is the first step before buying. Maybe support is a figment of imagination or simply another name for a reversal of trend.


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## tech/a (6 October 2009)

lukeaye said:


> Perhaps i should explain my thinking a little.
> 
> Here is what i am thinking.
> 
> ...




(3) Sellers with draw from the market at this level.
(4) Buyers with draw from the market at this level.

Point is movement can occur due to *lack of interest *from either party as opposed to* increased *interest from either party.


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## lukeaye (6 October 2009)

tech/a said:


> (3) Sellers with draw from the market at this level.
> (4) Buyers with draw from the market at this level.
> 
> Point is movement can occur due to *lack of interest *from either party as opposed to* increased *interest from either party.




Agreed.



> It finds support because buying pressure equals or exceeds selling pressure. In no way does it mean that buyers agree on value.




yes but the reason buying outweighs selling at that point, is because of that mutual agreeance between buyers/sellers, or an institution average its buying in the stock at a particular price.


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## Mr J (6 October 2009)

> s because of that mutual agreeance between buyers/sellers




Agreeing on a fair price? Many of market participants don't care about fair price; many only care about movement. Let's say buyers and sellers are battling it out and neither is gaining ground. This creates our point of interest (S&R), but where's the agreement? There is no agreement.


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## lukeaye (6 October 2009)

There has to be, if there is no mutual point of interest, then you wouldnt even be able to draw a straight line between the low points to create a support point, instead you would have volatile swings with no real organization, and no support


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## wayneL (6 October 2009)

Mr J said:


> Agreeing on a fair price? Many of market participants don't care about fair price; many only care about movement. Let's say buyers and sellers are battling it out and neither is gaining ground. This creates our point of interest (S&R), but where's the agreement? There is no agreement.




So a stock transaction arises from disagreement?


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## nunthewiser (6 October 2009)

wayneL said:


> So a stock transaction arises from disagreement?





yes actually 

one party thinks they are selling at the "best " price they going to get

the buyer party thinks they are buying at the best price they are going to get

neither of them agree with each other 


that was just a basic view and yes i realize theres more to it , was just being basic


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## wayneL (6 October 2009)

Well there may be differing opinions on "value", but there must be agreement on "price".


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## motorway (6 October 2009)

Mr J said:


> Agreeing on a fair price? Many of market participants don't care about fair price; many only care about movement. Let's say buyers and sellers are battling it out and neither is gaining ground. This creates our point of interest (S&R), but where's the agreement? There is no agreement.




The agreement is one of on price

Hence a transaction

It could be an amicable agreement
between different time horizons

eg a 30 year holder selling out to a day trader

Or a forced very unamicable agreement

eg a distressed seller ( margin call) to an eager buyer

or a 30 year would be holder buying a daytraders actioned stop

-->A dip buyer from a failed breakout play

Bargain hunters/FAs/TAs

Especially transactions between different time horizons

_It is when such scale diversity breaks down
That liquidity vanishes and everybody is then a Daytrader ( or well on the sidelines and out of the game )
_


etc

In P&F terms

support and resistance arise from differences of opinion

Such differences naturally resolve
The back and filling is the work building a cause that will produce an effect

Classically ( with qualification )

The direction with the most failures
points to a breakout in the other direction

But CONTEXT Qualifies

motorway


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## Mr J (6 October 2009)

A point of interest is different to an agreement. There is interest, but there is no agreement. It's always a battle, particularly since everyone is doing there own thing.



			
				WayneL said:
			
		

> So a stock transaction arises from disagreement?




Of course it does! In every transaction, there is a buyer and a seller. They do no necessarily oppose each other (example, both may be long, but one may be taking profits), but they obviously do not agree.



> Well there may be differing opinions on "value", but there must be agreement on "price".




There is never an agreement on price. When price is static, it simply means that neither side is exhausted enough for price to move.



> Would you like to explain to us how a transaction occurs without agreement on a price?




Okay, you're arguing something different, and something that doesn't seem relevant. The price of the transaction may be agreed upon (so a trade can take place), but the participants will never agree on where price is going, and that is what is relevant here.


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## wayneL (6 October 2009)

Mr J said:


> A point of interest is different to an agreement. There is interest, but there is no agreement. It's always a battle, particularly since everyone is doing there own thing.




Would you like to explain to us how a transaction occurs without agreement on a price? 

ROTFLMAO


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## lukeaye (6 October 2009)

motorway said:


> The agreement is one of on price
> 
> The direction with the most failures
> points to a breakout in the other direction
> ...




Thats what im looking for

but is there a correlation between volume, and the number of failures for an expectancy, of this break


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## lukeaye (6 October 2009)

So is it safe to say then, that at a support point, there is increased interest at this price to buy, and a decrease in interest to sell? so there in itself is an agreement?


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## Mr J (6 October 2009)

Maybe, maybe not. There's an agreement that it is a point of interest. The interest remains until one side overpowers the other. Hitting a support level may remove some selling pressure and introduce buying pressure, but that may only be enough for temporary relief of the fall in price. Often during a downtrend, price will fall to support, hover there and then plummet again. 

Your first post gave me the impression that you're basically looking for probabilities that support will hold, and that using volume etc to give you a high probability trade? Some traders do use volume. I don't, so I can't help you there. You may want to start looking at the tape (printing of orders).


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## prawn_86 (6 October 2009)

So what exactly do you use to trade Mr J?  I am yet to see an actual chart, or trade posted by yourself.

You seem to be willing to dish out strong opinions, but do not back it up with any evidence as to if those opinions are worthwhile or not (ie examples of your trades, both good and bad)...


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## Mr J (7 October 2009)

Prawn, if you're not going to value my opinions, posting trades won't change anything. Either you like the ideas, or you don't.


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## wayneL (7 October 2009)

Mr J said:


> Prawn, if you're not going to value my opinions, posting trades won't change anything. Either you like the ideas, or you don't.




What ideas?


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## Mr J (7 October 2009)

Is that a genuine question? Most of my posts in the trading section deal with discussion over a trading concept. I'm sorry you haven't noticed.


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## Timmy (7 October 2009)

prawn_86 said:


> So what exactly do you use to trade Mr J?  I am yet to see an actual chart, or trade posted by yourself.
> 
> You seem to be willing to dish out strong opinions, but do not back it up with any evidence as to if those opinions are worthwhile or not (ie examples of your trades, both good and bad)...




Probably worthwhile reading the question J - some examples/charts etc. could serve to put your theoretical musings into more concrete form?


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## Mr J (7 October 2009)

I know why people would want examples, but I haven't really been talking about my trading, but my trading ideas. Despite that impression I give, I'm not saying that I'm always right and mine is the only way, I'm only offering my view. It may be helpful, useless, right or wrong. The same goes for anyone else's opinion. 



			
				Prawn86 said:
			
		

> but do not back it up with any evidence as to if those opinions are worthwhile or not




Does an opinion really need an example to be decided whether or not it is worthwhile? My view is that people either like the opinion, or they don't. An example only illustrates that opinion. If the opinion is considered rubbish, then wouldn't the example be considered rubbish? I like people to judge the idea on its own merit, rather than judging it by results. I'll consider it for future posts.

Lukeaye, sorry for the off-topic discussion.


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## Timmy (7 October 2009)

Mr J said:


> I know why people would want examples, but I haven't really been talking about my trading, but my trading ideas. Despite that impression I give, I'm not saying that I'm always right and mine is the only way, I'm only offering my view. It may be helpful, useless, right or wrong. The same goes for anyone else's opinion.
> 
> 
> 
> ...




The point is J you have many, many opinions and I have yet to see even one backed up with an example.  Opinions are not to be liked or disliked, you have countless opinions and so far no examples.


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## prawn_86 (7 October 2009)

Mr J said:


> Despite that impression I give, I'm not saying that I'm always right and mine is the only way, I'm only offering my view. It may be helpful, useless, right or wrong. The same goes for anyone else's opinion.




Intentional or not, most of your posts come off as though your 'ideas' are correct and have been proven. Perhaps stating what you have done above more often would help to remove this impression.

Right, lets get back on topic


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## Kryzz (8 November 2009)

Lukeaye, 

Hows your findings been with re. to buying at support etc? 

Seems now would be a good time to bump this thread as my guess would be there would have been plenty of stocks coming back to support in this current "correction" in the market, case in point - ALL, coming back to resistance/support that was tested/rejected more than a half dozen times (keeping in mind it's fallen >20% quicksmart, not a very bullish sign)


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## skc (8 November 2009)

Kryzz said:


> Lukeaye,
> 
> Hows your findings been with re. to buying at support etc?
> 
> Seems now would be a good time to bump this thread as my guess would be there would have been plenty of stocks coming back to support in this current "correction" in the market, case in point - ALL, coming back to resistance/support that was tested/rejected more than a half dozen times (keeping in mind it's fallen >20% quicksmart, not a very bullish sign)




Somewhat similar chart for SSM... imo they are worthy of a punt but would only use stop entry on an up move, with tight stops.

What would be more interesting is if they fall below the support and you enter after they break through again...


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## lukeaye (9 November 2009)

Kryzz said:


> Lukeaye,
> 
> Hows your findings been with re. to buying at support etc?
> 
> Seems now would be a good time to bump this thread as my guess would be there would have been plenty of stocks coming back to support in this current "correction" in the market, case in point - ALL, coming back to resistance/support that was tested/rejected more than a half dozen times (keeping in mind it's fallen >20% quicksmart, not a very bullish sign)




Hi shaun,

Yes it has been a time where there have been a lot of stocks reaching support. I have treated this like any other support buying time.
As motorway said, it is from great one sideness, that you will get the most rapid and profitable reversals.

So on thursday, i bought into BHP, ANZ, GPT, VBA and SGM. And i bought alot. Im using very tight stops, but at the moment, my positions are looking very good, so i will be able to trail to breakeven.

Personally, im not convinced by all the banta about the market crashing, I tend to beleive that what ever everyone says, expect the opposite, that is of course the point of mis information.


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## lukeaye (9 November 2009)

The only thing im not happy with, is trading volumes.

They appear to be very very light.


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## nomore4s (9 November 2009)

lukeaye said:


> The only thing im not happy with, is trading volumes.
> 
> They appear to be very very light.




Why is this bad?


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## lukeaye (9 November 2009)

nomore4s said:


> Why is this bad?




Volume must always been taken in context.

A medium range move on low volume shows lack of participation from "profesional money". I see it at the moment, that nobody really wants to sell, because they are unsure at the moment, but there is not a huge amount of demand. The price will still go up because sellers are moving there orders up. So supply is available from a higher price.

Today has brought large volume with the move though.


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## nomore4s (9 November 2009)

lukeaye said:


> Volume must always been taken in context.
> 
> A medium range move on low volume shows lack of participation from "profesional money". I see it at the moment, that nobody really wants to sell, because they are unsure at the moment, but there is not a huge amount of demand. The price will still go up because sellers are moving there orders up. So supply is available from a higher price.
> 
> Today has brought large volume with the move though.




lol, maybe the "professional money" already has their fill from lower prices and doesn't need to buy at these levels but they aren't selling either so maybe there is just no supply at these levels and volume doesn't need to come in to support prices.

It seems to be a common misconception that low volume is a bad thing. But as shown by today's move, when demand does come in at a support area with no supply you get a strong move up.

The question now becomes where will supply come in and will there be demand at that level?


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## lukeaye (9 November 2009)

nomore4s said:


> lol, maybe the "professional money" already has their fill from lower prices and doesn't need to buy at these levels but they aren't selling either so maybe there is just no supply at these levels and volume doesn't need to come in to support prices.
> 
> It seems to be a common misconception that low volume is a bad thing. But as shown by today's move, when demand does come in at a support area with no supply you get a strong move up.




I never said that low volume was a bad thing? I said in this context it isnt a good thing. Im of the opinion, that you need high volume confirmations at or near reversal points. Low volume can be a good thing, but in this context it wasnt what i was looking for. High spread low voume days can be great indicators or price action.

Todays action saw increased volume, which we can now intepret as demand.

Professional money could very well have been filled earlier, im just giving one scenario, there are several which can explain whats happened.


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## lukeaye (12 November 2009)

For anyone interested, i sold out of all 5 positions today on open, for an average of 4R profit for each of the 5 positions. 

All of these were using my support buy strategies


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