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01/25/2008 Archived Entry: "Mixing support/resistance."
Bill wrote:
> Mr hughes. In your Fib Videos you say to not mix support with resistance fib levels.
> I just watched a trade where the trader mixed resistance fibs with support fibs.
> Is there any validity to what he did because it worked out?
> Please advise. Bill Bill, Resist the urge to prove them wrong, to prove yourself right. He/she is confused. Don't argue, let them go with it. The more people get it wrong, the better for us. Encourage them! You win when they think they are right. Some people believe that support becomes resistance and vice-versa. There are "experts" who will perpetuate that myth without realizing how unreliable it is. (see breakout note below) This is probably why that trader thinks they should use that technique. While this works sometimes, it is not automatic and far from reliable. It adds confusion, reduces clarity, and generates profits for someone else. Have you ever seen a breakout fail? About a zillion times a day, right? Breakouts fail very often (majority of the time). Those are examples of support/resistance not being reliable when reversed. Shhhhh! Support becomes resistance, resistance becomes support. (wink) -Neal.
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