Emini Support and Resistance - How To Trade The Zones
September 8, 2014 at 2:36 PM (QQQ)(SPY)(GLD)(SIRI)(PRAN)
Emini Support And Resistance -
How To Trade The S/R Zones And Levels
One of my first mentors in the world of Technical Analysis and Emini Futures Trading had a proprietary method for creating Support and Resistance levels in the S&P, Russell and other Emini markets. I begged, pleaded, cajoled, tried to reverse engineer, (you know - the same stuff you do to try and get my recipe), but he would never crack. Not even close.
Turns out... it didn't matter. Once I accepted the fact that he was never going to tell me how he did it, I took another approach. I humbly asked, "Since you won't teach me how to cook them up, will you at least show me how to trade them so I can get profitable?" You see, in my desperation to figure out the how, I completely overlooked the why. I mean, whether you string them together yourself, or someone else does, they only make you money (the reason we trade), if you can somehow use them in your trade setup and / or overall methodology. Right?
The reason I missed this up front was, another friend who automated the process on a daily basis for us, just kept telling me they were the most accurate levels in the world. I heard it and read it in emails so many times, I just believed. After all, these guys had been at this for years and I was a brand new noobee. I surrendered, submitted and decided that while he might be able to divine the most accurate levels in the world (I wasn't quite sure what that even meant), I was going to become the very best at trading them.
I tried, I strained, got up early, stayed up late, meditated, medicated, calculated and repeatedly asked him to please show me how to take the "most accurate Emini Support and Resistance Levels" in the world... and turn them into cash. Wasn't looking to be greedy, just a few points a day... the siren song of the S&P.
Just 2 points a day (or 1 Russell Point). He tried. I believe with all my heart he gave it his best shot. He tried to explain it, but I never quite got it. He spoke my language (English), yet I never understood a word of it. Hearing it and understanding it, worlds apart. I believe to this day he still uses them, same method and formula, but I'm pretty sure he's still the only one who can turn them into money.
CFRN Weekly Trading Zones
Years passed (after I gave up on them), but I never forgot. In my mind's eye I could clearly see how it should look. Price moving freely and elegantly from areas where Buyers were anxious to hit the Ask, to the spot where Sellers were equally as anxious to hit the Bid. Although I never actually saw this in my friends work, I somehow knew it was there. Somewhere, buried among the tickets littering the exchange floor, amidst all the hopes and dreams, fortunes made and lost, there was a rhythm, a vibration, some form of numerical connective tissue that wove it all together.
Not a silly combination to the bank. Not an ancient secret, hidden for centuries in a cave somewhere. Inscribed on a wall, or tucked away in a clay jar. Not the fan, not the wave, but something concrete. Something real. Something that could be used not to predict the future, but to peer just far enough over the horizon, based purely on mathematics, that could and would guide me in my quest to succeed. The fact that it would make me look really cool as well, never once entered my mind (seriously).
It's difficult to discover anything if you're not quite sure exactly what it is. What it looks like, how it moves or behaves. Not to be deterred, I was always on lookout - 24/7. One afternoon, amidst my normal routine, preparing for the day to come, I saw it. One minute it was simply a sheet of paper with an enormous jumble of numbers and then - there it was... At this point I was pretty sceptical of everything. I had been down so many blind alleys, tripping over things that weren't even there, I almost discounted it. I came this close (~) to brushing it off, crumbling it up and tossing it away... but I didn't.
I held on to it. I watched it. I spoke not a word to nary a soul. I was amazed, baffled, curious and a tingle ran down my leg (I may have thought I had met the President). It was better than that. As anxious as I was to put it to work, I (a tinkerer) needed to know the how. How was this possible? It was everything I had imagined. Every thing I had searched for. I held it in my hand and could not simply accept the gift. I poked and prodded. Twisted and turned. Eventually, I just said - OK.
All the work, the midnight oil, the turning and burning, the eureka moments followed by a blur of despair as the light of day blew away what just hours before (after 7 Vente' Wet Late's latter) and a day or two without REM, had made perfect sense. Somehow, in that moment in time, as the world stood still causing cars 'round the Globe to bump the fender in front of them... it jelled, came together. The stars aligned, all the pieces of the puzzle slid together as if by magnetic attraction and suddenly it looked exactly like the picture on the box. Except I never had the box. Only a vague recollection of what it should look like if I had it.. and now I did.
The rest as they say... is Emini History. Oh, over time it started to make sense. The rhythm I had always known was there, really was. Tangible. I embraced it and have never let go. Like the smile of the Mona Lisa I was staring at something unchangeable by human hands. Immutable. A gift from above. Enlightenment delivered on Angels Wings. Wisdom of Solomon. Hand crafted by the Ancient of Days, knowledge that had always been... and always would be. Far bigger in scope than all markets combined (yes #FX too), a tattered and worn... anointed fragment, from the very fabric of the universe.
I could only wonder if anyone else had ever seen it, embraced it, understood it? From that day forward I wove it into everything I thought and did when it came to the markets. It was more than a turning point. It was, the dawn of a new day and the beginning of a bright future, not just for me, but for those who would come to be known later, as CFRN Partners.
How To Trade Support And Resistance
This brings us back to a familiar spot. All the knowledge in the world, today's high price or low, tomorrow's open or close, has zero value unless you have a method for trading it. Such information, handled haphazardly, can actually be dangerous. Costly. Even Deadly.
Trading any form of Support and Resistance can be as simple as buying the Support and Selling the Resistance. As I wrote over the weekend on the Google Plus Emini Blog, I believe trading Support and Resistance is the single most powerful and reliable method for everything from Stocks, to Bonds, To Emini Futures, Metals, Grains, Softs, Currencies and whatever else I missed.
There are many methods and criteria for gathering these data points based on many men and women's interpretation of what qualifies as good S&R. Any good book on technical analysis will show you their way. Even when Buyers fail to complete their job, or Sellers fail to complete theirs, they almost always "give it a shot". As long as they "give it a shot", price will typically move up or down at least enough, to allow you to meet a "realistic" daily goal. If you can't grab it all in 1 trade, simply wait for the next one to come round. It plays out in every market in every time frame, every day, day in and day out, again and again, over and over. Once you understand it, all you have to do, is show up.
Why CFRN Weekly Trading Zones
Beat All Other Support And Resistance Levels
Our "formula" for lack of a better term, identifies areas that are important and not always visible to the naked eye. When visible they often seem out of Synch with regular levels as they may appear above or below the ordinary level. Buyers or Sellers worried about missing the next big move, will often move in early. This leaves some Traders at the station, and often when coming in early either on the Buy or Sell side, once can find themselves alone at the station. Just you, the brisk night air and the sketchy dude kicking the can who seems to have more interest in you than the can.
Buyers and Sellers often come in early to prevent being left behind. When there's crowd funding for the trade, that's a sweet spot. When the crowd doesn't show and you do? Run! The Good News? Our Zones tend to possess an intuitive insight into the areas that represent, volume - participation and volatility.
Following are articles that describe how price behaves in and around our Weekly Tradng Zones. Reasd the articles, study the charts. Go through our blog here on the site to see more charts. Also visit http://twitter.com/CFRN.
Dow - Zone to Zone to Zone - Consilidation
A years worth of Charts are on the Google Plus page and 2+ years on Twitter. Step back over 3 years to see Zones @ http://archive.cfrn.net our old site and now a basic curation station.
Charts and Trade Alerts are available at our Emini Google+ Community. Download the Google Plus App from iTunes or the Google Play Store (it's free) and make sure you get the latest Alerts, live in real time delivered straight to your smart phone, tablet, phablet, or iWatch (coming soon).
Questions?
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