One of the greatest leaps forward in my development as a trader came when I realised I was not trading the actual market, but rather an approximation of the market created by indicators.
 
 This is a common error for all newcomers to the markets, when they first discover the profit they would have achieved by entering on a moving average crossover at the start of a massive bull run and holding until the opposite cross. Of course, as I soon discovered it's not that simple. But so began the almost standard several-year search for that perfect combination of indicators that always gets you in and out of a trade at the optimal time - the commonly referred to holy grail. Of course, everyone kept saying that the holy grail doesn't exist, but that didn't stop me for searching for it.
 
 Eventually though, all searches for the perfect indicator end in frustration. Many just quit the markets. But for me, the light bulb came on when I realised I had to find the truth beneath the indicators. What was the truth to the market structure itself, not the indicator's representation of that market?
 
 There are a number of truths that I identified, which will be the subject of numerous articles in the future, however one of the core features of the market for me is the concept of support and resistance.
 
 Support and resistance are a truth of the market. Price movement is based on the underlying relationship between supply and demand, and human nature results in this creating areas of support and resistance.
 
 One of the greatest explanations I've discovered of the support and resistance concept comes from a trader from Chicago named Sam Seiden. Has a number of articles he's written for SFO (and other magazines) and available for free from his Resources and Education page at www.samseiden.com .
 
 If trading the 'truth' of the markets rather than the 'illusion' of indicators is something that interests you then I highly recommend you read all of Sam's articles. If you just want a quick 'bite-sized' introduction to the concept, start with the article, 'Keep it Simple'.
 
 Brilliant Stuff!!!
 
 Happy Trading,
 Lance Beggs

---

Add this page to your favorite Social Bookmarking websites