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In video 19B, Al says that any S/R could be best depending on the context and the strength of the S/R. Are there any parameters which define the strength of a S/R?
I'm talking from an Emini perspective where these points are precise.
The variables are the parameters themselves, in some sense, so as there becomes a confluence of factors, those areas become stronger.
Example, a wedge bottom at 10:00 am at yesterday's marked low. Those are 2 factors for a reversal, but it may also be an area of 1:1 the overnight asia range (profit taking). Making 3 factors. If the last bear bar was a very large bar, finishing on its low in this area, and you watched it, it may have performed as a magnetic pull into that low area. Now there are 4 factors.
In essence, this becomes understanding context and confluence. The underlying aspects are precise in name, but have a myriad of ways they apply (which is what makes trading, and learning to trade more difficult). The size of the bars are a factor. Series of bars are a factor. The tightness of the channels are a factor. Profit taking zones are factors (because they are based on probabilistic targets). etc.
However, what Al has outlined, both as method and application is both precise and correct. When applied with good risk management, which handles the variability of application, it all comes together well.
Hopefully helpful and good trades to you!
Thanks Eric! Your explanation with the example helps.
I was only thinking on the lines of confluence, but equally important to add the context too.
