And why is this worst place to put your stops?

It gets hunted.

So… how do you avoid it?

Well, you can’t avoid it entirely.

But here are two things you can do…

👉🏾 Set your stop loss a distance from SR
👉🏾 Wait for candle to close beyond SR


Let me explain…

Set your stop loss a distance from SR

You can do this by using the Average True Range (ATR) indicator.

Here’s how to do it in:

👉🏾 Identify the low of Support
👉🏾 Find the ATR value
👉🏾 Take the low of support minus the ATR value

If you want to learn more, go watch this training video below:

📌📌 Wait for candle to close beyond SR

Here’s how it works…

You only exit your trade if price closes below the low of support or the high of resistance.

Here’s what I mean:

And here’s something interesting… do you know the “real move” usually occurs after traders get stopped out of their trades?

And you can take advantage of this scenario by using a trading strategy I’ll share with you later.

But first…

📌📌📌 Truth #5: Trading at Support or Resistance gives you favorable risk to reward

A big mistake traders make is this:

Entering trades when the price is far away from SR. This requires a large stop loss and offers you a poor risk to reward.

An example:

But if you let price come to you, then you’ll have a tighter stop loss. And this improves your risk to reward.

Here’s what I mean:

😳😳😳😳😳 Remember…

Patience pays in trading. Stop chasing the markets and let price come to you.

📌📌📌Pro Tip:📌📌📌

Mark out your SR areas in advance. Then look for trading opportunities when the price has come to your levels. If the price is elsewhere, stay out.

Now…

If you want to learn more, go watch this training video below:

https://youtu.be/cfEXir1-nEs

📌📌📌 How to tell when Support or Resistance will break — so you don’t get “trapped”

The takeaway is this:

👉🏾 Support tends to break in downtrend
👉🏾 Resistance tends to break in uptrend
👉🏾 Support and Resistance tend to break when there’s buildup


Here’s why…

❌❌ Resistance tends to break in uptrend

Here’s a fact:

For an uptrend to continue, it has to consistently break new highs. Thus, shorting at resistance is a low probability trade.

Instead, going long at Support is a better trade.

❌❌ Support tends to break in downtrend

Likewise:

For a downtrend to continue, it has to consistently break new lows. Thus, going long at support isn’t a good idea.

But, going short at Resistance is a great idea.

Next…