Support Buying

[wayneL]

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?

 

[nunthewiser]

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

 

[wayneL]

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

 

[motorway]

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

 

[Mr J]

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.

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.

 

[wayneL]

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

 

[lukeaye]

The agreement is one of on price

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

But CONTEXT Qualifies

motorway

Thats what im looking for

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

 

[lukeaye]

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?

 

[Mr J]

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).

 

[prawn_86]

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)...

 

[Mr J]

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.

 

[wayneL]

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?

 

[Mr J]

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.

 

[Timmy]

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?

 

[Mr J]

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.

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.

 

[Timmy]

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.



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.

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.

 

[prawn_86]

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

 

[Kryzz]

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)

 

[skc]

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...

 

[lukeaye]

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.