Support and Resistance trading strategy || Beginners Guide to Support and Resistance || TTI
hey everyone this is a trader investor in this video i want to talk about uh support and resistance there's uh some confusion right if when we get to support price is supposed to reverse when we get to resistance price is supposed to reverse or if we break through it we take the position on the other side but i want to show you how it is important to understand what support and resistance are how to draw them right especially if you're a beginner in this thinking uh and support and resistance is a zone not a specific point on a specific line it's a zone and it's also not just a horizontal line it can also be a trend line that is going diagonally up or down and you can combine it with various things with demand zone supply zone but i'm not going to confuse you with that in this video i'm just going to focus on support and resistance so the first thing i usually do is look at my monthly chart and see where we are on the monthly chart and as you can see the monthly uh was in the queues looking at the queues the monthly had a nice uptrend right that it keeps breaking and what i mean by keeps breaking is if we start here in march of 2020 when uh the markets collapsed because of confidence then recovered soon after that when you look at that and you draw some touching points the last four or five months has been choppy we've been going up and down that uh trend line now it's okay uh you can keep redrawing it but i you know when you keep redrawing it it kind of gets confusing as to you know what is the right thing to do what is going on is it really moving in the right direction uh or is it doing something else uh because you're gonna keep redrawing it and you're gonna miss the point so uh as long as you have it touch a couple of points that just gives you a reference so we broke out of that uh trend line uh and then on the weekly i'll just make sure that we are still seeing uh the same thing similar things uh that we are seeing i'll redraw these i just want to show you how i get to them right so here the weekly that trend line is broken and we're on the other side of that trend line until we form a new trend line up or down we're just gonna take a look at that and then i'd like to go to the daily and this is where i add additional uh trend lines to you know more recent price action if you look at more recent price action i like to draw them i like to draw them in different colors so that i know which one i drawn the mostly which one i drew on the daily and so again the idea behind this trend line that is broken is still there so we're going to get to a little bit more in depth but i just wanted to show you how i keep drawing them by going down to lower time frames and then from the daily i you know i like to use the daily for my horizontal uh trend lines and what i see here is uh i'll draw it across the whole line instead of just that point is this is an area where price has tried to touch multiple times to the trying to go up resistance resistance resistance multiple times it acted as support a couple of times support support and then it broke through twice it did not close below it one time close below it but it immediately reversed this is an area for manipulation where short traders would be trapped again you see it here playing around there uh and then after that the last few days we have completely collapsed from this uh area so it's good to keep that into the picture and if we see more of them down here fry's played in this area multiple times multiple times multiple times so here is additional ones that you can see now and i'll just draw the ones that are near our current price point and like i said because it's a zone right i'm trying to find an area where price has touched multiple times right down reversed or up reversed up reversed up played around that area played around that area for a while before it continued those are going to be important areas of support important areas of support when you combine those other things you will not be required to draw these areas because i draw them as a zone i already know this is a zone so i'll draw it that way that's what you see with this demand block here but that's another video that really goes into details uh and and then we'll go down a few more times uh because we want to see more touches because uh this is where price is uh and maybe one or two more to see okay here's an area where prices spend a lot of time in this area here in this area here in this area here prices spend a lot of time so this is a couple of areas now that we are playing with now what's important is these lines did not happen this last couple of weeks or not even this whole month of january they were in play for a long time right in december back before december october time frame september time frame they're always in play and so what we're looking at is when price comes down to that support area when price comes up to that resistance area what does it do that's the purpose right many points that's why we want many as many touches as possible to make it a strong area when price comes to that area what does it do does it struggle right does it hit on this day rejected hit the next day rejected the third day get past it but then stopped out this is where manipulation happens and then it continued up so very very important areas when price comes to here very important to see what it's doing critical to understand what it's doing before you jump in and trade in any position just because it went down here it doesn't mean it's going to go down here right and then when price drove up and it came back down to that area tried to go through rejected tried to go through rejected came up again barely got there rejected the next day tried to get there rejected the third day a little bit of an attempt rejected froze day came down passed it rejected closed above the following day this is where people got trapped people who thought ah okay now we're really bearish because we have gapped down this much i'm gonna take a short position well you know if you did it at the open you were happy for a few hours and then price reversed on you uh so it's very very critical and and we have to also see what is the most recent trend line support resistance this areas where price came down twice this is more recent it's not as strong as ones that do it multiple weeks multiple months but more recent we have a double bottom right here so do you trade into this double bottom right very critical to understand this uh support and resistance areas right you don't have to draw these once you understand how they work you see price comes down it comes down again double bottom am i going to hurry up and enter to the other side no it comes down again right it goes through here again rejected goes down next day goes down some more now this short people hopefully they took profits because you know the following day it came back above got rejected when you when you combine this with a structure when you combine this with lower highs lower lows higher highs higher lows you get confidence to enter some positions maybe a little bit sooner but understanding that if if you enter sooner up here you have lower highs that keep forming lower highs so if you enter in this area what do you do when price comes to your support line do you exit at that support line or do you hope to continue down well in this case that didn't last long so you gave back a lot of profits every single day in this case it lasted a little bit longer and because i'm assuming lower highs and you've taken your position somewhere here when you get down to here do you take some profits or do you hope it's gonna break now it's maybe the third time it's going to break we don't know if you kept holding it reversed on you and you were back in uh not a loss but much less of a profit so do you continue to drive those expectations or do you know that this is a strong area of resistance and support up up up up up up up up and then down down down down down that it tried a few times so here's where i say take your profits take your profits in this area if you're brand new to support and resistance take your profits right don't let price reverse on you one of the things i always say don't give back profits if you're in a nice position don't give back profits you you take a position here and it comes to this trend line right price comes to that trend line didn't break it one day two days three days now the first time it went then and got rejected did you take your profit because otherwise the next day you don't break even if you're doing options you might even be losing because a few days have gone by and so what do you do do you then uh take you know you come down to this trend line you know this is a trend line because you drew it do you take your exit that's that's critical otherwise you have to go all the way up here and then come all the way back down here i do not teach roller coaster trades i teach knowing when to enter and when to exit before you even place the trade before you pull the trigger you know i'm going to enter here lower highs i get an indication that i'm going to go short i'm going to go short here and i get an indication that at this trend line price did not slice through this trend line it actually touched and struggled i'm exiting here right this is why you draw your trend lines very very you draw it turn nice and it doesn't matter what instrument you're working on doesn't matter what instrument warehouse price been multiple times right when you take this vanguard real estate uh etf in this area the 111 area price got rejected multiple times multiple times even here it consolidated around that area one day above it one day below it another day above it another day below it very very key area when it comes down it struggled for a couple of days before it broke through even then it can reverse back and now it tested it as resistance and collapsed so knowing your strong areas of support and resistance where price has been multiple times do not be picky like oh it's touching here but it's not touching here it's barely touching here i don't care i'm not picky because for me the way i look at these is it's a zone it's a zone like this it might even draw a little bit it's a zone so uh if you're new maybe you want to draw it as a zone like this draw it in um in some colors that you can see clearly that that you can see clearly uh and then we change the opacity here same thing that we do here right maybe just play around with it uh like this and say oh okay every time i draw a line i'm actually going to draw a box to say somewhere in this vicinity is my support and resistance very very key to understand this where has price been multiple times and as a reminder we start with our uh monthly right at least for me that's how i start and where has price spent a lot of time coming down to up comes down to it up comes down to it where has price done that multiple times that's that's my trend line is it respecting that trend line when i go to my weekly right i see it clearly is it respecting this trend line when i go to my daily when i go when i see this trend line is still respecting it i don't need to draw any new ones right and so on the daily now i can just focus on drawing my support and resistance very very important to understand this concept it is critical to your trading when price comes down what does it do you take action accordingly right if you have taken enough profits when it comes down to support you're not sweating it if it reverses because you've taken enough off the table right 50 of your position 75 percent of your position is off at a strong support then you let the rest right right you don't sweat a little bit of a rally while it's going down very critical and then you you keep drawing your your lines you keep drawing your lines because this is where we are multiple times this is support support resistance support support again support price came down and held we don't know what's going to happen next but for now it's only so we know when price has gone through the first support our target is the next support since we draw these we already know ahead of time to expect this target and and then as you start drawing these demand zones that's for me that demands on many many times aligns with his uh support area so i that's all i need to draw but that's a little bit more advanced and you can look at those videos but here once you understand resistance support resistance support and it's a zone and when price gets there do i take action like do i enter do i exit i prefer to enter away from that zone and then come back down to it but there are multiple other scenarios where you can enter it even around that zone but the one thing i will say is if if you see price breaks through do not be in a hurry to enter because they are most likely going to come and stop hunt this and then take people to think that it's going to go short they're going to stop hunt them they're going to do this and you might not see it if you're only looking at the daily bar you might see this in a one-hour bar in a 15-minute bar or less but in a on a day it might just look like a doji a hammer or something but they might have done this multiple times so when you come to an area of support resistant an area of value do not be in the hurry to enter any direction ideally what i like to see is price breaks out of it it comes and forms a base it forms a base that it does not break higher low higher low key part and i can enter when price breaks this area or if i am confident that it's holding here enough i can enter when this pin bar here is formed so i will erase these so you can see better when this is being a short-term support right we i talked about short-term support earlier when this is being a short-term support and you get a nice pin bar boom you take it especially when you're playing options these are going to be awesome hopefully this has clarified for you support resistance trend line as support and resistance as well because trend line at the upper side acts as the resistance at the lower side acts as support just like you've seen here support price reverses support rejected but then we're on the other side the whole market is uh in correction so you see that the whole market is in correction you know that because we have a significant move high to low right high to low significant move in any market that you look at that's a significant move we have i told you right uh we're way past five percent correction alright everyone take care and i'll see you in the next video you
2022-01-27 04:08
