Food for Thought

wisp

Well-Known Member
#13
I think Lance Beggs might say, Breakout buyers buying from those who booked their profit at resistance combined with those who took short at resistance? Add to this any early morning buyers who wanted exit when price came back to where they bought.

23K volume chart



reverse of Wycoff spring? but i think in Wycoff spring price should reach support on low volume and the spring back should be on high volume, not sure if today's action meets the reverse of that criterion.
 
#15
Hi Rajesh, the SMART Trader!

I have been studying your book the Decision Points. Really inserting one...

Thanks for such a nice book making trading easier...

And

Thanks for 'Reviving' this forgotten thread.

Hope it will be not forgotten again... :)
 

Pradeep Narayan

Well-Known Member
#16
Rajesh

Here is what I think. Price moves because there are sellers & not because there are buyers... once you apply this thought process to the charts you will notice why certain zones act as supports or resistances.

Your question was 2 fold - one why do people sell/buy below perceived resistance/support levels. The reason is that this level would hold as majority of the selling pressure was present or absent at these levels. That is a calculated risk certain people take.

The next part of the question was - who does this? Dunno... maybe TR, TP, ST :).. but definitely not Me!!
 

Attachments

Niranjanam

Well-Known Member
#17
Pradeep
Price stop moving down due to two reasons
1.Buyers overwhelm sellers. That is Buyers dominate
2.Sellers get exhausted. A selling climax.
In this situation, there will be a lot of sell orders. BO orders+Stop triggering. So it is not because of the absence of sellers but because of buying below the level. But who is buying below a support and selling above resistance?
People buy at support and sell at resistance. But I have not so far come across a method or system that recommends buying just below support and selling just above resistance.
 

Pradeep Narayan

Well-Known Member
#18
Rajesh

I can understand your situation... I was in that couple of months ago :)
Imagine that a stock's price is moving down... what does that imply? It means that people who were selling/hoping to sell at a higher price are now selling below their expectations.

Now imagine the stock price is moving up... this means that folks who were selling lower yesterday could have sold at a better price now.

A better example would be the real estate market... assume person X had purchased a flat in Pune around 6000/- a sq.ft. Lets assume that there is a buyer at 6200, but this person X is not selling the flat. At this instant - the market price is still 6000 and not 6200 despite a demand at that rate. Lets now assume that person B comes up with 7000 proposal and X sells his flat at 7000/- a sqft. Now the market price is 7000.

In another instance, say this person X desperately needs cash and is willing to sell his flat at 6000/- sqft. There could be a potential buyer at 5800/-. But the sale should happen for the price to come to 5800/-. Do you see what I mean?

Ultimately, if there are no sellers... the price is not going to go up or down.. it will remain static. This is my point of view... try it out and you would see what I see in terms of support and resistances. :)
 

wisp

Well-Known Member
#19
But I have not so far come across a method or system that recommends buying just below support and selling just above resistance.
I think Sam Seiden advises selling above supply and buying below demand. Not sure if his followers have enough volume though.
 

Niranjanam

Well-Known Member
#20
I think Sam Seiden advises selling above supply and buying below demand. Not sure if his followers have enough volume though.
I dont think so. Sam recommends to buy at a demand zone with a SL below the extreme. Image from one of his article. (Click)
Frankly I do not like this. I prefer the TST entries of Lance Beggs where you enter at the extreme with a SL far below it
 

Similar threads