Effectiveness of S/R Levels & Retest Mantra

Trading without Indicators continued…

Whenever Price touches a particular level on a specific \”Time Frame\” multiple times, that level tends to become weaker. S/R levels are strong for first 1-3 attempts, post which the strength of holding that level loses it\’s intensity.

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In this image, India\’s most volatile Trading Instrument- Bank Nifty Future Chart has been taken as example. This is supposed to be most Wild Animal in Trader\’s community! S/R levels are holding strong even with this Index, which indeed proves that we can use these levels for Trading with few more set-up tweaks without using any Fancy Indicator!

Breakout or Fake-Out? Try it with Re-Test Mantra

Most of us get trapped in Breakout & Fake-out! The danger part of Fake-outs, if not controlled, becomes Freak-outs with our Trading Capital! Let’s have a look at Nifty – 15 min Chart

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See this, how beautifully, level 1 & 2 have are being respected! So S/R works well on higher TFs for initial 1-3 times before becoming weaker! Here we can easily take reversal trades during Intraday! This is considered as foundation or distribution / accumulation zone. It’s indication that opponents are adding more ammunition & if these S/Rs will soon lose the battle. Price will soon find a new Zone of S/R.

But before Actual Breakout happens, there is a Fake-out made to deceive opponents! This is intentionally created to eat out last lap of all orders & then price goes like a Rocket!

So what is this Fake-out & how do we identify it? Stay tuned for more!

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