If you follow the โtheoriesโ above, it would cost you money in the long run. Because these are the biggest lies about Support and Resistance trading strategy.
And itโs not your fault because these are stuff thatโs being taught in trading books and courses.
But donโt worry.
After reading this trading guide, youโll never make these mistakes again.
But donโt worry.
After reading this trading guide, youโll never make these mistakes again.
โ๏ธโ๏ธSpecifically, hereโs what youโll learn:
๐๐พ The 5 things about Support and Resistance (losing traders are not aware of)
๐๐พ How to find favorable risk to reward trades
๐๐พ How to tell when Support or Resistance will break, so you donโt enter trades at the wrong time
๐๐พ A Support and Resistance trading strategy โ that lets you profit from losing traders
๐๐พ The 5 things about Support and Resistance (losing traders are not aware of)
๐๐พ How to find favorable risk to reward trades
๐๐พ How to tell when Support or Resistance will break, so you donโt enter trades at the wrong time
๐๐พ A Support and Resistance trading strategy โ that lets you profit from losing traders
๐๐Truth #1: The more times Support or Resistance (SR) is tested, the weaker it becomes
First, letโs define Support and Resistance:
Support โ Area on your chart with potential buying pressure
Resistance โ Area on your chart with potential selling pressure
Support โ Area on your chart with potential buying pressure
Resistance โ Area on your chart with potential selling pressure
Now:
Youโve probably read trading books that sayโฆ the more times Support or Resistance is tested, the stronger it becomes.
But the truth isโฆ
The more times Support or Resistance is tested, the weaker it becomes.
Youโve probably read trading books that sayโฆ the more times Support or Resistance is tested, the stronger it becomes.
But the truth isโฆ
The more times Support or Resistance is tested, the weaker it becomes.
Hereโs whyโฆ
The market reverses at Support because there is buying pressure to push the price higher. The buying pressure could be from Institutions, banks, or smart money that trades in large orders.
Imagine this:
If the market keeps re-testing Support, these orders will eventually be filled. And when all the orders are filled, whoโs left to buy?
Hereโs what I meanโฆ
The market reverses at Support because there is buying pressure to push the price higher. The buying pressure could be from Institutions, banks, or smart money that trades in large orders.
Imagine this:
If the market keeps re-testing Support, these orders will eventually be filled. And when all the orders are filled, whoโs left to buy?
Hereโs what I meanโฆ
๐๐๐Pro Tip:๐๐๐๐
Higher lows into Resistance usually result in a breakout (ascending triangle). Lower highs into Support usually results in a breakdown (descending triangle).
Letโs move onโฆ
Higher lows into Resistance usually result in a breakout (ascending triangle). Lower highs into Support usually results in a breakdown (descending triangle).
Letโs move onโฆ
๐๐๐Truth #2: Support and Resistance are areas on your chart (and not lines)
This is a mistake Iโm guilty of. Treating Support and Resistance (SR) as lines on my chart.
Why?
Because youโll face these two problems:
๐๐พ Price โundershootโ and you miss the trade
๐๐พ Price โovershootโ and you assume SR is broken
Let me explainโฆ
Why?
Because youโll face these two problems:
๐๐พ Price โundershootโ and you miss the trade
๐๐พ Price โovershootโ and you assume SR is broken
Let me explainโฆ
โโ Price โundershootโ and you missed the trade
This occurs when the market comes close to your SR line, but not close enough.
Then, it reverses back into the opposite direction. And you miss the trade because you were waiting for the market to test your exact SR level.
This occurs when the market comes close to your SR line, but not close enough.
Then, it reverses back into the opposite direction. And you miss the trade because you were waiting for the market to test your exact SR level.
โโPrice โovershootโ and you assume SR is broken
This happens when the market breaks your SR level and you assume itโs broken.
Thus, you trade the breakoutโฆ but only to realize itโs a false breakout.
This happens when the market breaks your SR level and you assume itโs broken.
Thus, you trade the breakoutโฆ but only to realize itโs a false breakout.
So, how do you solve these two problems?
Simple.
Treat Support and Resistance as areas on your chart, not lines.
Simple.
Treat Support and Resistance as areas on your chart, not lines.