Office was quiet as a mouse today so carpe diem: made a video, answering a question that I have been getting from my early days of writing this blog. Key points:
- Confluence rules above all. Confluence in identifying the level and especially, confluence in execution.
- Wait for a natural movement in price. We want to see price completing a reasonable cycle prior to exiting a position or putting on new exposure.
- Use the inside of the range, not ultimate highs or lows as taught by conventional wisdom.
- Identification is relatively simple. Just seek multiple hits over and over again.
- These levels are simply transition points for order flow and rarely go away over time.
- The more the line is used the more it's “fade” value deteriorates.
Topics used: Basic support and resistance, measured moves on trendline breaks, triple taps / 5 point price structures (ranges)