S/R rejection trading insights

[Bordux]

Hello traders. I was reading about reasonably simple price action trading strategy and I was wondering if there are traders out here who are using it successfully. The strategy is as simple as placing sell/buy stop orders when anticipating a level rejection; as shown in the picture:

How powerful is the strategy, how wide are your stops, what you look at when drawing S/R, what time frames do you prefer to use with this strategy, what are your entry criteria and what other opinions are you able to share to contribute to the discussion?

 

[ForexVerified]

If you use such strategy then you will need to look on the candle patterns and higher time frames to confirm that the price could indeed go further up.

 

[Bordux]

If you use such strategy then you will need to look on the candle patterns and higher time frames to confirm that the price could indeed go further up.

Surely, not having candle patterns in mind, using stop orders gives a degree of insurance that the price indeed is reversing, don't you think? I personally trade daily TF and I find it easy to analyse.

 

[carnelian]

It is indeed a very powerful strategy, in fact its the simplest most powerful strategy available. But there are many aspects that you have to look in order to trade this strategy like overall market look, candle stick patterns at those levels and trend.

 

[mlawson71]

It's about the best strategy I've ever used, combined with candlestick patterns for confirmation of the entry point. As for my stops, they're usually 20-30 pips below the support (or above the resistance.)

 

[ForexVerified]

Surely, not having candle patterns in mind, using stop orders gives a degree of insurance that the price indeed is reversing, don't you think? I personally trade daily TF and I find it easy to analyse.

I usually trade on H4 time frame, using daily and weekly charts to confirm the movement. S/R zones are great for setting up trades, but I decide whether to take profit/exit based on candle patterns rather than simple S/R, because many times the price reversed before reaching the S/R and it was hinted by the candle patterns long before that.

 

[Ken Smith]

It's a good trading strategy. But with this strategy candles are very important. And if you add Volume with it, that would add more value. But the end it's all about what you understand the most. What works for is the best strategy for you. What works for me may not work for you and vice versa.