Home Trading Strategies Support and Resistance Cheatsheet (95% Of Traders Don’t Know This)

Support and Resistance Cheatsheet (95% Of Traders Don’t Know This)

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Support and Resistance Cheatsheet (95% Of Traders Don’t Know This)

hey hey what’s up my friend so in today’s training right i want to share with you my support and resistance cheat sheet why simple right because support and resistance is one of the most popular concept in technical analysis and there’s a lot of information out there and when there’s a lot of information out there you get conflicting information how do you know what’s real and what’s not about support and resistance so that’s why i’ve created this cheat sheet video to share with you the most important concepts about support and resistance once you’ve watched this video right you pretty much right would have mastered support resistance you’re pretty much a hate right of 95 of traders who won’t know this stuff okay so to kick things off right i will share with you number one how to tell when support and resistance will break so you don’t get caught on the wrong side of the move this is powerful stuff because if you know that support is going to break then you won’t be buying and if you don’t buy you’re going to save money good good good okay number two why not all support resistance areas are created equal and how do you actually identify the best ones that offers the greatest profit potential the third thing right how do you actually find losing traders to push the price in your favor so you can actually take profits while they cut their losses i know that sounds sadistic right but it’s true and finally support and resistance how do you actually find profitable trading opportunities right overlooked by 90 of traders okay so without further ado let’s kick things off number one how to tell when support resistance will break so this is the key thing okay so when you see right this is resistance when you spot a higher or rather a series of higher lows into resistance looking like this right series of higher lows higher lows higher lows into resistance this is when you want to avoid selling at resistance why is that and the reason is simple right let me give you an analogy let’s say in in your hands right now you have this huge sledgehammer long and huge and strong and in front of you is a wooden door you take the sledgehammer and you smash against the door right many times right over the next few minutes let me ask you is the wooden door likely to hold or is it likely to break well common sense will tell you that the door is likely to break and this concept is the same as what i’ve just shared with you in trading right when you test right resistance multiple times within a short period of time chances are that area of resistance will break not 100 right there’s nothing 100 about trading but the odds of it right that resistance is breaking is higher okay and likewise right when you see when you spot a series of lower highs okay into support okay lower high lower high lower high lower high lower high into support chances are support is gonna break because again sledgehammer smashing against the door multiple times chances are it’s gonna break so let me share with you a few examples right so you can you know understand where i’m coming from so over here you see aussie here and this right series of lower highs lower highs lower highs lower highs into support so do you want to be buying at this area of support or do you want to be selling or maybe let’s say you don’t even want to sell at least stay on the sidelines right you don’t want to be buying at this area of support because chances are it will break down let’s see another one how about bitcoin right a market that you know traders were so fascinated in the 2017-2018 period look at this you see a series of lower highs lower highs lower highs lower highs into support over here do you want to be buying at this area of support i hope not right because chances are this area of support will break down because this is uh signs right there sellers are in control they have managed to push the price lower each subsequent push right they managed to push it lower lower and lower another example over here you can see bitcoin again this is the area of resistance series of higher lows higher lows higher lows do you want to be selling at this area of resistance i hope not right because this is gain right signs that the buyers are in control this is where the sledgehammer right has smashed the door multiple times right you want to avoid selling uh at this area of resistance okay so hopefully this concept right has uh make you understand where i’m coming from number two right how do you find the best support resistance areas to trade well the trick is this the trick is you want to find a strong power move right into support resistance now what do i mean by power move right so a power move is simply right strong momentum into an area let’s say resistance right you see strong big bullish candle coming into resistance i know this sounds counter intuitive right why why do you want to sell right when there’s such strong bullish momentum and resistance why do you want to buy when you know there’s such strong bearish momentum into support rainer i get it right and i’ll explain to you shortly and the reason is because when you get a strong power move into an area the first obstacle is usually far away and when the first obstacle is usually far away it means you get greater profit potential on your trade and let me explain so if you look at uh this okay let’s say dollar sig okay i’m just gonna know okay so why is this black line here right now or very simple let me just zoom out the charts and you can see that this black line is actually this previous highs of his previous high over here okay so i’m i draw it out so i want you to pay attention to how the price approach that black line pay attention to the price section pay attention to this section over here what do you see you see strong bullish momentum into that area correct and at this point many traders are thinking oh man reign on the market is so bullish it’s time to buy buy buy and when they buy that’s that’s disaster right but that’s beside the point right why do i want to see a strong power move into resistance so i’ll explain so when you have a strong power move into resistance right i mentioned earlier that your first obstacle level is usually far away so what do i mean by first obstacle level so at this point let’s say you shot at resistance let me ask you at which point on your chart will buying pressure come in so let’s imagine now you shot this market then you look at this chart okay man rain away where am i buying pressure coming where will the buyers step in well if you ask me right the first obstacle that the sellers would face probably would be this area over here where this previous swing high could i can support around the 1 41 area okay so at this point you can see that your profit potential is pretty decent right let’s say you went short on this candle your profit potential from here all the way down to here that’s quite a large distance compared to when you don’t have a strong power move into a level let’s say you have a choppy move like you know a higher lows into resistance right you can see that your profit potential will dramatically be reduced so let’s go back to the earlier example of bitcoin you can see what i mean so earlier bitcoin okay so again you see over here let me let’s try this one here okay now this is the area of resistance okay and here you see the series of higher lows into resistance so let’s say over here there is a bearish candle here just imagine this is bearish i’m just going to change this to bearish okay black color bearish at this point if you were to be selling where is your first obstacle right your let’s say imagine you you sold at this imaginary black candle here where is your first obstacle well chances are your first obstacle is possibly at this swing low over here or if you know you are connect using you know trend lines that first obstacle might be even be higher over here so you can see that there’s really not much profit potential right because of this choppy price action coming into resistance so that’s why i said right when you want to trade support resistance right the best areas to trade are those with a strong power move into an area this is where your profit potential is the greatest this is where your first obstacle is usually far away so let me give you another example uh dollar mexican okay uh that’s what you see over here okay so again you have a pretty nice power move coming into this swing high pretty nice power move so ask yourself where is the first obstacle on this chart well if you ask me probably at this swing low right this is where buyers would come in to buy it near this swing low so from here all the way down to here offers you profit potential right which is much better compared to the price section where price forms a higher series of higher lows into resistance one more example right palm canadian same thing here you see a nice strong power move here into this swing height now ask yourself where on this chart might buying pressure come in if you ask me right i would say the first obstacle right could possibly be at this over here right where previous resistance could become support in other words in other words your profit potential let’s say let’s imagine that there is a bearish candle here your profit potential could be from here all the way down to here there is a distance right for the market to move which results in a more favorable risk to reward on your trade okay i hope that makes sense so this is how you find the best support resistance areas to trade power move into support resistance avoid trading right when you get a very choppy stair-stepping move into support resistance because that’s where those levels usually break down third thing right how to find losing traders to push the price in your favor so you can take profit while they get stopped out right so where do you find this group of losing traders the secret is this you want to let the price take out the extreme level so let’s say you are wanting to sell at resistance you want the price to take out the extreme highs of resistance why is that right that’s because you can profit from track breakout trader so again i’ll explain how this works so you can see over here okay at this point you’ve seen that this market has took out this highs over here this is the extreme high of resistance okay not this one but this one here and why is this significant because let me ask you right when you see the price break out of the extreme high what’s your thought process well i’m sure there will be a group of traders who are thinking oh man reina the price has broke out of the extreme highs this is bullish it’s time to buy and then they buy or especially if the candle closed green even better more people will buy because it’s confirmed that the market is about to break out higher the candle is close above resistance so let’s boy yep so dubai okay and when you buy the breakout right let me ask you where will you set your stop loss okay so i’m just going to think how a retail trader would think they would probably put their stop loss let’s say below this low well that’s a pretty common level or maybe below the previous candle low or some traders might even be more conservative below this area of support that’s possible so what’s happening right now is that let’s say the market didn’t break out and instead it reversed it does 180 degree reversal like this candle over here this means right if the price hits lower it will trigger this cluster of stop loss here here and possibly even here from this group of breakout traders make sense so in other words right when the breakout traders lose when the breakout traders have their stop right being hit right that’s where the reversal trader that’s where you are the trader who sold at resistance can profit from this group of traders to break up traders so this is why i mentioned earlier you want the price to take out the extreme levels because when it breaks out of the extreme high when he breaks down of the extreme low that will entice right more traders to trade the breakout because let’s be honest whenever you trade breakouts where do you set your your breakup price point probably at the extreme highs right or at the extreme lows if the price you know breaks above this size i’m in the trade and you always reference the highest you know the extreme highs or at resistance or the extreme lows of support right and that’s how we are going to take advantage of this group of traders so let me share with you another example right look at es the weekly time frame so okay you can see over here i’m going to zoom out and i’m going to plot this level here now why why why this level right again same same concept right because this is the extreme low many traders in the s p 500 they will look at this chart and say man is the extreme low of this market if the price breaks below this low i’m going short that’s their thought process and yes price indeed break below this level in fact it closed below that level very bearish right if you followed the news during this point of time right market is bearish so you look at all the news the media’s you just say the market is collapsing it’s time to sell then guess what price took out the extreme lows the next week it break and reverse right closing back near the highs right of the previous week this is what we call or we call a false break set up and again this is bullish right because for traders who are short right imagine traders who are short this this lows right let’s say you shot this lows where will you put your stop loss i’m guessing probably above this highs maybe above this highs and those really conservative one possibly even here but this is much lesser because stop-loss here is too wide so probably above this highs or this highs so in other words as the market rallies as the market hits this cluster of stop loss here and here it’s going to fuel right more buying pressure to push the market in your favor because when traders are short and they set their stop loss above this level their stop loss is actually a buy stop order to get out of their short trade so if the price hits this stop loss right it will create buying pressure from the stop loss that just got hit make sense okay so yeah so this is uh what i mean by you know price taking on the extreme levels one more example before we move on so here again same thing look at this where is the extreme level here extreme level here is at this point okay price strong power move taking out this heist then we have a somewhat like a doji looking pattern i don’t think we call this a gravestone doji and the next candle is smashed lower below uh resistance so again imagine this imagine right traders again who bought at this price point they bought when the price breaks above resistance when they bought when the price closes above resistance oh this is bullish right now look at this where do you think will they put their stop loss again right how a retail trader would set their stop-loss is probably below this lows this lows that’s what i’m guessing and if the market reverses right okay you can imagine right that it will hit their cluster of stop-loss right which will fuel more selling pressure which is what actually happened okay and on top of it right notice that this again is a nice power move this is a nice power move okay so let’s let’s take another concept here so imagine if you are shot this market where might buying pressure come in well the first obstacle if you ask me would be somewhere here right where previous resistance resistance to could act as support so again nice strong power move right this offers you great profit potential on top of it the price took out this prior highs and reverse right where you know uh breakout traders are now trapped this means they’re stop loss so i can further push the price in your favor and hopefully to your this first target over here make sense okay so yeah so that’s the third concept that i want to share with you how to find losing traders right to push the price in your favor and finally right how to find support resistance trading opportunities that most traders you know overlook very simple right so what you want to do is this right go up to a higher time frame so let’s say you enter on a daily timeframe go up to a weekly timeframe and look for a build up look for a build up like this or otherwise known as a tight consolidation because when the higher time frame is forming a tight consolidation chances are you are able to find support resistance trading opportunities on the lower time frame so for example let’s say the weekly let’s call it tc right tight consolidation you go down to the daily you should be able to find support resistance trading opportunity or how about let’s say the daily is in a tight consolidation you go down to the four hour you should be able to find support and resistance trading opportunities so let me give you a few examples before we wrap things up so again right let’s say on the daily time frame over here daily okay over here this is another one okay this is another tight consolidation you see here on the daily time frame of course right you’re not able to trade the highs and the lows over here because the price action here is too compact but when you go down to a lower time frame right in this case the four hour time frame you will see that this is actually support and resistance that you can trade off so let me give you an example let’s go down to the lower time frame okay so this over here is the daily you see earlier this over here is the four hour let’s change this to new zealand canadian okay uh this one here okay got it so you can see that over here now this consolidation you saw in the daily timeframe this is the daily and this is the forward chart this is the support and resistance area on the forward chart so you can see that yes on the daily it might be difficult to trade off this uh consolidation or the build up but when you go down to the four hour time frame things become much clearer and now you have visible resistance to trade off support that you can trade off right to buy low and sell high so this is another technique that you can use right to find support and resistance trading opportunities okay so with that said let’s do a quick recap number one avoid buying lower highs into support or higher lows into resistance okay because this is when uh support and resistance tends to you know break up remember the sledgehammer analogy that i shared with you earlier uh if you want to trade reversals right look for a power move into support resistance this you know is because the first obstacle is usually further away which offers you greater profit potential third thing right let the price take out extreme levels so you can profit from trade breakout traders and finally when you spot a build up on the higher time frame okay this would usually lead to trading opportunities on a lower timeframe in the form of support resistance so i said earlier right if you see a build up on the weekly time frame on a daily timeframe or even an eight hour time frame you can find support resistance to trade off if you find a build up on let’s say on a daily time frame you can find you know opportunities on the four hour time frame because the support resistance level will be much more visible okay so with that said right if you want to learn more right about support resistance price action trading then just go down to my website over here okay uh and download this guide right the ultimate guide to price action trading this one here right it’s free just click this orange button and i’ll send it to your email address okay so maybe when you see this video this layout might change because i’m doing a revamp to the website but again i’ll leave the price action trading guide on the home page so with that said i wish you good luck and good trading i will talk to you soon you

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