A basic, yet overlooked area of analysis in trading is most definitely support and resistance in reference to price action.
At least 90% of traders lose money, and one reason is that they don't know how to identify support and resistance levels. More importantly, they don't even know that support and resistance levels exist.
This video will take you through a full demonstration of how and where to identify support and resistance levels on a chart.
Support and resistance levels/flips are essential to a winning trading routine.
A basic, yet overlooked area of analysis in trading is most definitely support and resistance in reference to price action.
At least 90% of traders lose money, and one reason is that they don't know how to identify support and resistance levels. More importantly, they don't even know that support and resistance levels exist.
This video will take you through a full demonstration of how and where to identify support and resistance levels on a chart.
Support and resistance levels/flips are essential to a winning trading routine.
Key Points of the Lesson
UTILITY
Identifying support/resistance levels is key.
Marking out levels incorrectly will likely lead to losses.
In trading, basics are more pivotal than advanced theory.
HORIZONTAL LEVELS
Start on a high timeframe before going on a lower TimeFrame ⇒ (Yearly), Monthly, Weekly, Daily.
Use colour coding and labels for your labels:
Monthly: purple
Weekly: yellow
Daily: blue
The higher the time frame ⇒ the stronger the level.
FIRST PRACTICAL EXAMPLE
TIPS & TRICKS
To determine strong support/resistance areas ⇒ look for multiple touches on higher time frames.
Same process for every chart on every asset.
Horizontal levels are a skill you must master first before moving to more advanced tools and theories.
SECOND PRACTICAL EXAMPLE
TRENDLINE
Trend lines use a similar theory ⇒ at least 2 touches.
The third touch of the trendline can be used as an aggressive entry.
THIRD PRACTICAL EXAMPLE
TAKE HOME MESSAGE
Identify horizontal levels correctly ⇒ they are the building blocks for confluence.
Start on a high timeframe and move lower.
Master Horizontals first, before moving to other tools and theories.