Best trading strategy for beginner!
Basic charting skills for novice traders
Understanding Support and Resistance levels are a fundamental part of learning how to chart and trade.
It's the most basis concept but plays a tremendous role in technical analysis.
When one has a good understanding of support and resistance levels, he/she can start trading S/R flips.
Which is a relatively easy trading strategy. A S/R flip is when a Support level turns into a Resistance level and vice versa.
The first step is to learn how to identify key support and resitance levels. You'll get a hang of this fairly quick by practicing on Daily, 4H and hourly charts.
I would advice to stay away from lower timeframes in the beginning, due to the fact that it can be a little more tricky to identify clear levels there.
Once you get a hang of identifying support and resistance levels, try practicing with the trading strategy of trading S/R flips.
Select a chart, identify the relevant support and resistances that are close to the current price level and mark them with horizontal rays. (I have done this with the LTC/EUR chart for this idea).
For a select period (depending on which timeframe you selected; 1D, 4H, 1H), try monitoring the way the price reacts to the levels which you have drawn.
You might notice a certain patterns of the price breaking levels, and then re-testing them. This is called an S/R flip.
It shows that the previous resistance (which has been keeping the price from going up), has now turned into support (keeping the price from going down).
The same may apply for support levels turning into resistances.
How does one trade S/R flips?
Off course, the information provided here is a bit short-sighted. It is definitely as "black and white" as i have described it here.
There are other things to consider, like volume in-or decreases. Or larger chart patterns which are directing the price action.
However, the tutorial provided here should help you get well on your way!
Please note i am doing this for educational pruposes and am still learning myself!
I am not a professional trader or financial adviser.
Understanding Support and Resistance levels are a fundamental part of learning how to chart and trade.
It's the most basis concept but plays a tremendous role in technical analysis.
When one has a good understanding of support and resistance levels, he/she can start trading S/R flips.
Which is a relatively easy trading strategy. A S/R flip is when a Support level turns into a Resistance level and vice versa.
The first step is to learn how to identify key support and resitance levels. You'll get a hang of this fairly quick by practicing on Daily, 4H and hourly charts.
I would advice to stay away from lower timeframes in the beginning, due to the fact that it can be a little more tricky to identify clear levels there.
Once you get a hang of identifying support and resistance levels, try practicing with the trading strategy of trading S/R flips.
Select a chart, identify the relevant support and resistances that are close to the current price level and mark them with horizontal rays. (I have done this with the LTC/EUR chart for this idea).
For a select period (depending on which timeframe you selected; 1D, 4H, 1H), try monitoring the way the price reacts to the levels which you have drawn.
You might notice a certain patterns of the price breaking levels, and then re-testing them. This is called an S/R flip.
It shows that the previous resistance (which has been keeping the price from going up), has now turned into support (keeping the price from going down).
The same may apply for support levels turning into resistances.
How does one trade S/R flips?
- In a bull market, traders can wait for price action to break through a previous resistance level.
If the price manages to break through the resistance and close above it, that indicates that the resistance has been broken and now functions as support.
Traders can enter a trade from the moment the candle closes above the resistance level, OR play it more safely and wait to enter on the retest of the broken resistance.
The trade is invalidated when there is a failed retest attempt where the price falls through the level.
However, do note that prices can always "wick" through a level, without actually closing below it (which is a clear sign to get out). - In a bear market, traders basically trade the same way only in a different direction.
Traders will wait for the price to fall through a support level and open a short when the candle closes below the support lvel OR wait for the price to retest the broken support level.
Off course, the information provided here is a bit short-sighted. It is definitely as "black and white" as i have described it here.
There are other things to consider, like volume in-or decreases. Or larger chart patterns which are directing the price action.
However, the tutorial provided here should help you get well on your way!
Please note i am doing this for educational pruposes and am still learning myself!
I am not a professional trader or financial adviser.
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