Level scalping

We all know that most if not all tech trading is based around support and resistance, be it fixed like historic levels and psych levels or moving like EMAs and pivots.

However, with working of bounces on resistance and support level of any sort, too often we see that price just pushes through and the question always how big stop loss is. Important is not to make to small to get hit on momentum move that will turn soon, but making it too big we either risk too much or should dismiss many trades as potential profit is not too big. However, here is what I have been thinking playing around this week with a next best thing to raw tick market - M1 charts, observing and studying price habits. Actually very entertaining and very informative. There are repetitive patterns mostly around SR levels of all sorts. There are two things that can be taken off it: more often then not price will bounce off them even if a little bit, or it can consilidate around the level and then in most cases it will push trough in the previous direction. By studying price action at these levels (alerter can be used - not need to sit staring charts) we can better our edge and increase chances and also we can take few nice scalps while bigger trade in under development. One this I noticed being mostly present is that price will first pile through the level, go out from 5 to 15 and rarily to 20-25 pips (pound pairs can go even to 30-35), and then return. When it returns to the level there is a big chance it will continue it's backwards move for another 5-10-15 pips at least, this is almost a free cheese as stop losses will be very small too, around 10 pips so those 10 pips as good as 40-50 in intra-day trading due to the lot size. But even more importantly by observing how price react around that level we can judge whether to enter our longer time trade or not. In conclusion, there is nothing more pure and real than a price action, no indicator can be used at those core levels and they lag too much, however this low level can often help with trades set at the higher time frames. Same applies for exits, when you are not sure whether to hit kill switch or let it run. Go down to the earth, look at the core price action on M1. After some not long time you should develop a feeling for it.