IvanGlobalPrime
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Qualifiers You Must Know To Call Support & Resistance Like a PRO
In this article, I am going to dissect a paramount concept in trading. Independent of the asset you are trading, most traders should care about it. I am referring to the selection of high quality support/resistance. This is my go-to guide to determine how to pick the SR areas of most significance where decisions will be made.
As a result, horizontal support and resistance areas act as a magnet to attract and repel prices due to the liquidity that resides near-by. Since every participant can spot the whereabouts, it is precisely at these junctures where the larger share of stop placements will be found, which creates pools of concentrated liquidity, hence areas of interest worth fighting for.
Accounting for these dense layers of orders stacking is absolutely essential for large players with a need to transact hundreds of millions of dollars either on behalf of their clients or for purely speculative purposes. Besides, areas of support and resistance become the bread and butter where market makers will look to intervene in anticipating of rotational movements.
Have you ever asked yourself, what would happen if large sums of capital were to be transacted around thin liquid areas? Plain and simple, big players would be shooting themselves on the foot by getting poor entries. Why is that? Because the lack of counter-parties to fill in their orders would lead to average entry prices that are far from ideal.
An option widely used is to split up large orders into fractional blocks (smaller lot sizes) to disguise the big core positions, what’s referred to as iceberg orders.
That’s why major players are especially active around these areas of high liquidity. The viral and often misunderstood term of stop loss hunting is simply a by-product of the normal market dynamics in need to seek out pockets of relevant liquidity concentration. Thinking that these players are there to get u is nonsense. Liquidity is the oxygen of every large player, it’s essential to have them involved at the size of trades they intend to. There is no better place for large players to get involved than at the areas this article will teach you to identify.
Qualifiers You Must Know To Call Support & Resistance Like a PRO
In this article, I am going to dissect a paramount concept in trading. Independent of the asset you are trading, most traders should care about it. I am referring to the selection of high quality support/resistance. This is my go-to guide to determine how to pick the SR areas of most significance where decisions will be made.Why static horizontal areas are so important?
The reason lies in the ability we all have as traders to easily eyeball where these areas are located in the chart. This makes such horizontal areas the most universal form of reference for participants to use. It also makes the selection of these battlegrounds objective in nature as the market can easily agree on the location.As a result, horizontal support and resistance areas act as a magnet to attract and repel prices due to the liquidity that resides near-by. Since every participant can spot the whereabouts, it is precisely at these junctures where the larger share of stop placements will be found, which creates pools of concentrated liquidity, hence areas of interest worth fighting for.
Accounting for these dense layers of orders stacking is absolutely essential for large players with a need to transact hundreds of millions of dollars either on behalf of their clients or for purely speculative purposes. Besides, areas of support and resistance become the bread and butter where market makers will look to intervene in anticipating of rotational movements.
Have you ever asked yourself, what would happen if large sums of capital were to be transacted around thin liquid areas? Plain and simple, big players would be shooting themselves on the foot by getting poor entries. Why is that? Because the lack of counter-parties to fill in their orders would lead to average entry prices that are far from ideal.
An option widely used is to split up large orders into fractional blocks (smaller lot sizes) to disguise the big core positions, what’s referred to as iceberg orders.
That’s why major players are especially active around these areas of high liquidity. The viral and often misunderstood term of stop loss hunting is simply a by-product of the normal market dynamics in need to seek out pockets of relevant liquidity concentration. Thinking that these players are there to get u is nonsense. Liquidity is the oxygen of every large player, it’s essential to have them involved at the size of trades they intend to. There is no better place for large players to get involved than at the areas this article will teach you to identify.