SUPPORT AND RESISTANCE INDICATORIn this video Ill be using 3 indicators RSI , STOCH and Support and resistance
Supportandresistancezones
How to trade Support and Resistance levels? BINANCE:BTCUSDTPERP
Support and resistance levels - are price areas on the chart where the price has ever changed its direction. This place always attracts traders, because near the levels there are obvious places for setting stop losses and entering a trade. Also, there are always limit orders of large buyers or sellers near the levels.
We can say that the level is the price area in the market, where traders consider the price to be too high or too low, depending on the current market dynamics. Therefore, it is always important to pay attention to key levels at which support and resistance have reversed roles or there has been a strong price rebound. We can designate support and resistance levels as the place in the market where traders are more willing to buy or sell, depending on current market conditions. This creates a collision zone between buyers and sellers, which often causes the market to change direction.
What are levels?
Support level is an area on the chart with the potential strength of buyers. The moment when buyers enter the market. The resistance level is an area on the chart with the potential strength of sellers. The moment when sellers enter the market with a large volume, which allows them to take advantage of the buyers and stop the price increase.
When the price breaks the support level, the support becomes resistance.
Conversely, if the price breaks through the resistance level, the resistance becomes support.
- On higher timeframes, support and resistance levels gain more strength. It is important to pay attention to the nature of the price movement from the level:
- If the price immediately turned from the level into the opposite trend, then this level can be considered significant.
- If the price tests a certain area several times, making a small pullback, most likely, this level will be subsequently broken.
How to draw levels on the chart?
Support and resistance levels are not lines on the chart, but areas or zones. No need to try to draw them exactly according to the shadows or bodies of the candles. Strive to achieve the maximum possible number of price touches of the levels. This will usually require you to move the level up and down until you find a spot where the market touches that level the maximum number of times.
You do not need to rewind the chart far to mark all the important levels. Most often, traders look only at the current monitor screen. Therefore, 100-150 candles will be enough. Most of the levels you will need will be based on price action over the past six months.
Focus on key levels that are immediately visible. Don't draw too many levels on the chart. Try to keep only the main ones and discard the secondary ones. If you find yourself wasting too much energy looking for levels, you are probably drawing more levels than you really need.
How to use support and resistance levels in trading?
A level is a place for a possible entry into a trade. If an additional confirming signal appears at the level, you can think about opening a position. Stop losses are placed by levels and possible targets for profit fixation are determined.
In books on technical analysis and on the Internet, you can often read that the more often the price tests the level, the stronger it is. But this is a gross mistake. In fact, the more the price touches the level, the weaker it becomes.
Imagine that we have a support level. The price bounces from this level because there are buyers in the market. If the price often returns to the level, this means that buy orders are gradually being executed. And when they are fully executed, then who will buy? Therefore, when there are no buyers at all, the price breaks through the level.
It is important not to forget that support and resistance levels are, first of all, zones, and not exact lines on the chart. Otherwise, you may encounter two problems in your trading: the price does not reach the level and the price goes beyond it.
When the market gets close enough to the level without hitting it, you may miss the trade because you were expecting a trading setup to appear exactly at the level you chose.
In a situation where the price goes beyond the level, you think that the level has been broken out and you try to trade the breakout, but this often turns out to be a false breakout.
How to solve these two problems? Very simple. Always treat support and resistance as zones on your chart, not exact lines.
How to find out what will break the level?
As we already know, support is an area with potential buying pressure. Therefore, when the price approaches the support level, it should turn into the opposite trend. But what if this does not happen and the price starts consolidating at the support level?
This is a sign of weakness as the bulls are unable to forcefully push the price up. Or there is strong selling pressure in the market. In any case, this situation does not look optimistic for the bulls and the support will probably not be able to resist.
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✅Disclaimer: Please be aware of the risks involved in trading. This idea was made for educational purposes only not for financial Investment Purposes.
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Setting Support and resistance levels using the CSC-HARSI 2022Watch the video to get FULL details and listen to some commentary. Always feel free to ask questions below. I love talking with you guys.
Here is how we do it:
Set your RSI and VWAP as its Moving average in the CSC-HARSI
The lower the RSI setting, the more S/R levels you'll find.
So don't set your RSI to a low setting on a large timeframe chart. For example: Dont set your RSI to 9 on a 1hr chart.
Commonly I trade off of breaks of the 50 period EMA on my chart so i set my RSI to 50 and my chart to 1hr.
1. Setup your RSI to a 50 period length with source as CLOSE
2. RSI MA Settings: Set this to the VWAP (NOTE you can not change the RSI MA length if you set it for VWAP as it is now LOCKED to the RSI length)
3. Look for places on your CSC HARSI where the RSI and VWAP close at exactly the same level.
4. The close must results in a crossover and NOT a bounce.
5. If the Heiken Ashi close was a bullish candle, you mark a horizontal line on your chart ABOVE the candle
5a. If the Heiken Ashi close was a bearish candle, you mark a horizontal line on your chart BELOW the candle.
More on Support and Resistance Zones In this short tutorial, we look at support and resistance zones and how we see them. The way to adjust yourself wth them.
TIP: TRUST, FOLLOW YOUR INTUITION
Pro Traders Take Profits on EarningsWhat happened today on the earnings announcement by PEP? Pro traders took profits against the retail crowd's buying on the news headlines that suggested an earnings "beat" for Q2. The retail buying causes the gap up at open, which is a prime cue to take profits on swing trades.
This was what we call a pre-earnings run. The earnings results don't matter as much as the technical setup a few weeks ahead of the earnings release. Swing trades were initiated at the reversal from the support at 155, confirmed by price and volume patterns at that time.
Now, with resistance overhead, where the initial target for this earnings play was, and the retail crowd causing a gap up at open on the earnings announcement, this is where professional short-term traders close long positions. This should not be construed as a good opportunity to short swing-style, however. It is an example of the execution of a long swing-style earnings strategy.
This is an example of TechniTrader's Relational Technical Analysis techniques for planning better trades.
How To Trade Probability Ranges The Critical Rule of 1/3Using the Rule of Thirds to Master Probabilities in trading and investing ranges
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Stocks typically remaining in consolidation ranges 70% of the time while trending the remainder.
Using the rule of thirds, we can use statistics, prior price action and the probabilities of success to determine when to enter trades where the odds are stacked in our favor.
1) We start by finding a stock that is in a consolidation range, and identify the nearest important support and important resistance levels based on your targeted trading timeframe.
2 ) We take the range between the support and resistance levels and divide it into thirds, so we have three zones within the consolidation range.
3) When going long, you want to BUY the stock when it is within the bottom third or the zone from support to the 1st third level. Once you buy, your objectives are to hold during the middle third of the range, and sell during the top third.
When you buy in the first third, this gives you a 66 percent chance of success. If you buy in the second third of the range, you only have a 50/50 chance of success. Going long in the top third of the range, gives you only a 33% chance of success because you are already close to the resistance level.
When going short, the sequence and odds are reversed. You sell during the top third of the range, hold during the middle third and exit in the bottom third. This again gives you a 66% chance of success when you enter in the top third, 50/50 chance if you enter in the middle third, and a 33% chance of success if you enter in the bottom third as you are already close to the support zone.
****Using this simple trick, you can quickly evaluate trades based on probabilities and selectively enter trades where the odds of success are the highest and avoid likely losing trades. The rule of thirds also also gives you the confidence to continue to hold trades based on previous important ranges, and provides clear levels where the stock is likely to either reverse or start trending.
Hope It Helps to your Trading & Investing Success
Marc
The '5th rule' in support/resistance trades !!!There is a false and very deceptive saying in technical analysis when it comes to identifying strong and valid S/R levels, which says that the more tests apply to S/R levels the stronger they become.
excuse me WHAT?!!!!!
Many tests won't make support nor resistance levels any stronger, in fact, we have a rule here which mentions: ' the 5th touch of S/R level will most probably become a breakout '
most probably ladies and gentlemen, not 100%
the psychology behind this is simple:
every time we bounce from a support or resistance level, more retail traders will be attracted to open a position in the direction of the bounce, therefore a lot of liquidity will create for market makers, aka smart money, to join the party and grab their liquidity in their favor and move the market with ease afterward.
as lots of retail traders are not familiar with basic risk management methods, they put their stop losses just above or below the S/R levels, sooooo... liquidity will be provided. easy stop hunt opportunity !!!
this is in fact a common way for market makers to manipulate the market and deviate the price, trap as many traders as they can, and hunt every stop losses out there.
*one more key point: after the breakout, it's not 100% guaranteed that the S/R level is flipped. it could be a deviation!!
that it for today's article, please consider liking and following me if you find any of my ideas useful xoxo
How To Analyze Any Chart From Scratch - Episode 6Hello TradingView Family / Fellow Traders. This is Richard, as known as theSignalyst.
Today we are going to go over a practical example on USDCAD, but you can apply the same logic / strategy on any instrument.
Feel free to ask questions or request any instrument for the next episode.
You can find the previous episodes below "Related Ideas"
Always follow your trading plan regarding entry, risk management, and trade management.
Good luck!
All Strategies Are Good; If Managed Properly!
~Rich
A Roadmap Reversal Strategy Using Higher TimeframesHi Purpose Traders. If you've been struggling with reversals and when to use more timeframes to trade them, I created a video for my client Eddie that I wanted to share with you all. He has progressed so much and is overcoming one of the greatest fears most traders have which is relinquishing control over the trade.
I pray this video helps you as well. Be blessed.
Why Shorting support & Longing resistance gets traders REKT!INDEX:BTCUSD INDEX:ETHUSD FXOPEN:XAUUSD FRED:SP500 NASDAQ:NDX
I see this time and time again - no matter if you are trading, cryptocurrency, commodities, indices or stocks, the principle remains the same:
Shorting at support and longing at resistance is GENERALLY not a good idea.
I show you examples in the video and explain why.
There is however a good time to short at support - i.e. When it has flipped into resistance after the retest, changing the market structure - and the inverse is true for longs.
If this video helped you, please consider leaving a thumbs up and a comment if you have any questions!
Learn, learn and then learn some more!
Not financial advice. DYOR. Papertrade before using real money
Support & Resistance Trading: Ultimate Guide In this Tutorial I speak about Support and Resistance Trading strategies and how you can use the line chart to properly identify these levels in a more accurate way.
Most Visited Price by RuckSackEarly phase testing for our latest script, known as RS_MVP which highlights the Most Visited Price level in a specified range.
Different to a standard support/resistance indicator in that it targets the most visited price where orders have been executed. Doing so allows traders to visually see what price has the most potential orders which can help with entries as much as with stop loss placement.
You can see in this example how the price cluster leads to a trigger point. With the Most Visited Price being neither at a traditional support or resistance level, but markedly the following price action comes down to test the MVP several times. This gives potential entry opportunities, but also a useful tool for stop loss placements. We're going to explore this latter option more as we continue to build out this indicator, as many traders are looking for ways of avoiding unwanted stop hunts.
more @ traders-rucksack.co.uk
Sneak peak! Sneak peak at our current project. A quick snippet showing how price levels can be caught using our pivot tool to inform trade ideas based on Support/Resistance and Supply/Demand.
The tool is currently in a preliminary form, but we intend to optimise the level output to create a real eye view of the price action. Our goal is to mimic the price levels a trader would naturally spot and use for their trading, while added an element of sophistication to line filtering that is only possible using code.
Supply & Demand Zones Explained: A form of Support & ResistanceSupply & Demand Clusters are a form of Supply & Demand Zones and price can commonly find Resistance or Support on them. For those who are new to Technical Analysis ; "Support" is a area on the chart price and demand (buying pressure) increases from, with "Resistance" being the opposite, with price decreasing and sell orders (Supply of asset) increasing from the latter.
This makes them a great tool for finding exit or entry points for trades. The above images show how a Supply or Demand cluster is identified and drawn on the Cryptocurrency market charts.
To draw and identify the Zones first we must find areas on the chart that look similar to a tightly squeezed together rectangle. Price should then make a "thrust" (major increase, or decrease in value) from this rectangular area. We use the Rectangle Tool to draw a zone across these areas.
When price revisits them (as you can see on the bottom image) it tends to react to it; giving traders a opportunity to capitalise on these movement's. They also are a useful tool for gouging Risk & Price targets as when one Zone is "claimed" price tends to head towards the next like a magnet; so they become ideal take profit & SL (Stop Loss) areas.
In this particular image we can see how ETH:BTC clearly had important price reactions to these areas; with the uptrend starting from the original Demand Cluster marked at the Bottom Left. As the Price Action progressed - each level was "claimed" until we saw a continuation upwards.
Beginner Technical Analysis 101 - Support and ResisitanceBeginner Technical Analysis 101 - Support and Resistance.
When you are first learning to trade, the charts can seem very daunting. I wanted to share with you a quick lesson in market structure that will help you understand a few things.
You know how you don't see any nice cars around until you buy a nice car, and then they are everywhere? Actually they were there all along, but your brain wasn't programmed to see them. I won't get into the way the RAS works in your head but basically you didn't know what to look for so why would you see it? Trading is the same and I'm going to show you something here that will make you see charts totally differently forever - promise.
This is a basic concept of technical analysis in trading and one of the first things I do when I look at sizing up any trade. It's called Support and Resistance.
The concept is simple, prices of assets and contracts have particular levels that they react to. They may rise to a level and then (seemingly miraculously turn and fall back down. As a trader this is disheartening if you don't know whats happening. In fact, its a very simple concept.
When price hits a certain point and turn back down, we call this resistance. When a price falls and then turns back up, we call this support.
The really interesting thing is this - Resistance, once broken, becomes support. Support once broken, becomes resistance. It's one of the most basic, yet most powerful principles in trading and professional traders would never enter ANY trade without knowing their Sup and Res levels.
I've drawn a chart (don't judge me I'm not an artist I'm a trader) to highlight this point. Now you know a secret of the market. You know something most people will never know and next time you see a change in a stock price, think to yourself - "I wonder if it hit resistance" - because it probably did
If you want to learn more about trading and do some real education, I'm happy to recommend books and courses.
Happy trading and good luck!
