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[maxfox44]

Hi Guys

Just a simple newbie here. I've been trading on and off for about a year or so.

I can make small one/two tick profits, but it's not really worth spending all afternoon for. I've recently been seeking advice on how to spot resistance points and help predicting when a breakout may occur.

Can anyone point me to a forum/thread, article or other resource?

Thanks in advance

[bigcumba]

Moved your post to it's own thread - you'll get a reply quicker that way!

[Street cry]

Support and resistance is quite simple in horse markets. If you have a ladder interface you can crudely judge this by targeting price when it is in poorly bid areas that have supported or resisted price previously. A break of these levels can signify a breakout but the liklehood is they act as barriers for reversals back to the better bid areas.

Basically when trading you should be looking to buy the dips of an uptrend and sell the rallies in a down trend so try and use a decent chart from bet angel and visualise the price action as achannel.

If you can see that price is trending down then you would want to sell but preferabley when price has retraced from a new low to the top of your channel.

A simple way of attempting to use support and resistance would in my opinion to be.

1 identify the range

2 place orders at the extremeties

3 manage trades tightly with PT back within the range at the well bid areas

4 remeber that when trading reversals your stop should be closish to entry as if it goes afew ticks further from previous resistance the breakout could be on.

Sorry if this is all abit brief but it may provoke some ideas for you SC

[maxfox44]

SC, thanks for the above post. When you a little more time, could you post up an example?

[Street cry]

In reply no i can't post an example capturing screen shots was not really something i did a lot of when trading on betfair and as i don't have bet angel (as i don't trade betfair anymore) i can't really provide you with an example.

The methodology i described above is sound though so have alook for yourself and see how it goes .

[maxfox44]

Hi SC

No problem, I knew it was a long-shot.

When I've tried to follow the market (favourite on the horses), it doesn't seem to be limited to support/resistance bands and it breaks either way and sometimes by large percentages.

[Street cry]

It depends on at what point you are defining the support and res levels , if you are defining them before the market has traded in to 3 figures then it is unlikely that they are valid s&r levels . In my opinion a level needs to be tested before it is a valid level.

If you are seeing the breakouts you describe above then why not set up to buy or sell when price breaches these levels ??

[maxfox44]

I think that is a very interesting point. As most of the action in a horse race starts within the last 10 mins before the off, I think it's very difficult to be sure what is the actual resistance level.

[Street cry]

Exactly that's why i say that you need to in my opinion see the level tested , similarily abreak of the level and then a fail on retest can mean a stronger entry

[maxfox44]

So is that why sometimes a price can be test 3 times, but only break it on the third go? I've seen this three attempt pattern a few times.

[maxfox44]

I've often seen a resistance level tests twice before breaking on the third attempt.

[Win2Win]

I've often seen a resistance level tests twice before breaking on the third attempt.

You'll find on many markets, like Forex, Betfair, etc, it'll break on the 3rd attempt.

[maxfox44]

Is there a technical explanation as to why that works?

[Street cry]

Well obviously its all about money flow aint it when a low is held strong the bulls are winning but once they can't hold the markey any further the bears take over.

Its simple really once all the buyers are done all you have left is people selling and vice versa. The fact that a 3 touch break is significant is because in the main (like many trading TA approaches) it is self fullfilling, it is well known that this method works so naturally if you are long and the price has touched twice at a downward res level you will be ready to bail out or at least have your stop on the line for the 3rd hit, this inherently wil kick off a down trend.

If i was you i would simply be waiting till 5 mins to the off and place orders on the extremities of the range with a 5 tick stop and profit take in the middle of the range.

You culd aim to have a stop and reverse approach if the market breaches your stop.

[maxfox44]

I might try that today if the BF API is any good, but as you know with weekends its sometimes very slow.

[Street cry]

bf api is one of the reasons i gave up trading horse markets

[maxfox44]

What do you trade now, if you don't mind me asking?

[Street cry]

forex

[maxfox44]

Sorry to keep asking so many questions of you. Where do you trade the Forex?

[Street cry]

With a brokerage or a spreads firm

[Win2Win]

http://www.win2win.co.uk/forum/showthread.php?t=65631