Drawing Support and Resistance Levels

in this video I want to show you how to correctly draw your support and resistance levels so that your charts do not look like this oh what the hell is even that support and resistance or key levels are one of the most important things that you must muster when trading but 99 of Traders are still getting it wrong why is it so important because if you can find key levels correctly it can give you a high win rate trade opportunity look at this example right here there is a resistance level right here because price went up to this level and then reverse downwards so the next time when price hits this level again there is a very high chance that it's going to reverse downwards again so you could have entered right here a very common mistake that Traders make is that they draw too many lines on their chart just like this what the hell are you doing bro stop doing this how can you trade with like 10 000 likes on your chart this just makes you more confused while the whole point of drawing key levels is so that it makes it easier for us to analyze make it less confused the reason why a lot of you are still making stupid mistakes like this is because you do not follow the secret rules of support and resistance the first rule is multiple rejections you can see in this example price went down to this level three times before reversing back up showing us multiple rejections so we can draw a support level right here next every time price went up to this level it always rejects this level and reverses so we can draw another resistance level right here now you might be wondering what if the charts looks like this when there is no multiple rejections yet glad you asked which brings us to the next rule price needs to move away from the swing low or swing high in this example you can see that price has not formed multiple rejections yet but you can see that yes from a swing high and move away from it and when it just moved away and reverse and head back down it doesn't just move a tiny bit it moves significantly so what you can do is that you can draw a resistance level right here here's another example you can see that price has been going down it has just been the downtrend and then it went back down to this area right here and then reverse and shoot back up significantly so what you can do in this case is that you can draw a support level at this swing low the next rule is that a level can be both support and resistance support can become resistance and resistance can become supports you can draw like a support level right here because price reverse three times at this area and whenever price come back down to this area it always should back up so there's a very strong support level right here and look at what price did when price break through this support level it came back up to re-test this level and now your support level is acting as your resistance level you can see right now price is unable to break past this resistance level which used to be the support level next the levels must be near the current price when you are marking a key level you don't want to be marking one that is way too far away from where price currently is right now like these two levels right here these two levels they are irrelevant there is no point in drawing them because we only want to draw the levels that matters rights now because remember too many lines will look too confusing for us so in this case what I will do is that I will just draw a support level right here you can see whether price comes down here it always reverse and hit back up and then I will also draw another resistance level right here so these two key levels are the only key levels that matter now that you have understood these four secret rules let's apply whatever you just learned through the charts so in this example I can draw a resistance level right here because whenever price comes back up here it always reverses so this shows us that that is multiple rejections so this is a very strong resistance level and the reason I draw it right there is because it is also near our current price it's not too far away like all the way up here right it is near our current price so we still have to take into account this resistance level and then you can also see it right here this is when price move away significantly from our swing height and I can also draw another support level right here because whenever price comes back down here it always reverses and this just show us that this is a very strong support level because there is multiple rejections at this level and at this point of time this is when prices finally broken through our support level and look at what price did it come back up here to re-test this support level which now act as your resistance level and guys I want you to know that this entire area here is your support area all right remember a support and resistance they are not just one line like this all right this entire area is support area that's why you can see when price comes back up to retest this it does not come up to retest like a level like this it came back up to retest an aerial so you can see price went back up and reject this entire resistance area which was previously supports here's another example you can see that there is multiple rejections right here because whenever boys come back down here it always end up reversing and heading back up come back down reverse and hit back up so and then there is also a resistance area right here right so it's clear to say that this is a resistance area and this is a support area because it fully just satisfy the rules that we just talked about but do you want to Mark a level that is right here no because that is not where price currently is so it's irrelevant it's way too far away from us right now it's ancient history it's dinosaurs all right so we do not need to care about this levers that are like 10 years ago or even one year ago I don't know a few months ago you don't need to care about those levels all right I really want you to focus on where Price is Right Now focus on drawing the the most recent key levels like this the only time when I will draw this support level right here is when price breakthrough this support level and it's like going down then that is when I will draw the support level but if it's not if you still within this consolidation within this area you should not be drawing key levels that is like way far away from the current price now that you have learned how to identify support and resistance levels how do you actually trade them glad you ask so in this example I have marked out a resistance level right around this area because whenever price gets up there it always gets rejected and hit back down so this is clearly a very strong resistance area so the first thing you want to look out for at this key level is to see what price is doing its price gonna break past this level or is it going to reverse and head back down at this resistance level so in this case price actually gave us a Evening Star Candlestick pattern which is basically a reversal pattern that tell us that there is a lot of sellers in the market right now is no longer an uptrend and price is going to reverse and go back down and by the way there are literally like hundreds of reversal Candlestick patterns out there so you can just choose whatever you like but for me I just love the evening star Candlestick button because it's so easy to identify and I see this kind of stick pattern at this key resistance level that is the first sign that tells me that price is reversing but we do not want to enter here yet we don't want to enter immediately when we see our evening star we want to wait for multiple confluences right we need other confirmation that tell us that price is really going to reverse and head back down the next thing that I saw at this resistance level is the moving average crossover that is the next confirmation so you can see previously right around this area price has been above the moving average you can see all the candlesticks are just like above the moving average but right now at this point of time the moving average has crossed over so this is what we call the moving which crossover you can see right now the moving average is above the candlesticks now so that's the second confirmation that tell us that price is reversing so what I will do is that I will enter for a cell position right here when I see the moving average cross over the evening style reversal Candlestick pattern and price is at a key resistance level I got a three confirmation that I need so I will enter for our cell right here and I'll place my stop loss Above This resistance level here and guys remember you do not want to place your stop loss super duper tight like this because there is always a chance that price is going to go back up to this area and re-test it before heading back down so you want to give your stop loss a little bit of breathing room and if you guys know me you will know that I placed my take profit at the next key level so the next key level is all the way down here the reason I marked up this as a key level is because if you look towards the left it used to be a resistance level you can see right here it used to be a resistance level and now it's probably going to act as your support so that that would be by take profit and as you can see the trade literally went down and smashed our take profit and right now you have made a whole lot of money don't worry if you still do not get it here's another example you can see that right now price is at this major support area right here but we do not want to enter immediately when price is at this support level we want to wait for our confirmation we need three confirmation before we enter for the trade and right now we only have one confirmation which is prices at this support level that's the only confirmation that we have so we cannot just enter based on that so right now we still be patient and wait so you see like right now the next Candlestick price shown us is a bullish engulfing Candlestick a big fat green Candlestick at this support level what does that mean that means that there is a lot of buyers at this key support level pushing the price up this show us that price is not going to break fast this strong support level and that's a second confirmation the third confirmation is this moving average cross over you can see at this point of time the yellow line the moving average is going to go below the candlesticks now so now that we have our three confirmation I will enter for a buy right here and I'll place my stop loss once again below this support level and I can't really see because my camera is in the way up so I'll place my stop loss below this key support level and place my take profit all the way up at the next key level which is this resistance level right here and once again I marked up this resistance level because if we look towards the left you will see that it used to be a support level right here whenever I come back down here it always reverses come back down reverses so it used to be a support level and right now I'm expecting it to become a resistance level now let's look at how this trade will play out I'm just gonna fast forward this thing so that I don't waste your time and you can see like price just going up and going up going to our take profit and we just wait be patient and Bam we just smashed our take profit right here boys and we have close D3 great yeah it's really just as simple as that like this video If this video was helpful and smash on that subscribe button and if you want to take this strategy to the next level you need to combine this strategy with candlesticks and you can check out how to do that in this video right here welcome to the tribe and remember you're just one trade away [Music]

in this video I want to show you how to correctly draw your support and resistance levels so that your charts do not look like this oh what the hell is even that support and resistance or key levels are one of the most important things that you must muster when trading but 99 of Traders are still getting it wrong why is it so important because if you can find key levels correctly it can give you a high win rate trade opportunity look at this example right here there is a resistance level right here because price went up to this level and then reverse downwards so the next time when price hits this level again there is a very high chance that it&#39;s going to reverse downwards again so you could have entered right here a very common mistake that Traders make is that they draw too many lines on their chart just like this what the hell are you doing bro stop doing this how can you trade with like 10 000 likes on your chart this just makes you more confused while the whole point of drawing key levels is so that it makes it easier for us to analyze make it less confused the reason why a lot of you are still making stupid mistakes like this is because you do not follow the secret rules of support and resistance the first rule is multiple rejections you can see in this example price went down to this level three times before reversing back up showing us multiple rejections so we can draw a support level right here next every time price went up to this level it always rejects this level and reverses so we can draw another resistance level right here now you might be wondering what if the charts looks like this when there is no multiple rejections yet glad you asked which brings us to the next rule price needs to move away from the swing low or swing high in this example you can see that price has not formed multiple rejections yet but you can see that yes from a swing high and move away from it and when it just moved away and reverse and head back down it doesn&#39;t just move a tiny bit it moves significantly so what you can do is that you can draw a resistance level right here here&#39;s another example you can see that price has been going down it has just been the downtrend and then it went back down to this area right here and then reverse and shoot back up significantly so what you can do in this case is that you can draw a support level at this swing low the next rule is that a level can be both support and resistance support can become resistance and resistance can become supports you can draw like a support level right here because price reverse three times at this area and whenever price come back down to this area it always should back up so there&#39;s a very strong support level right here and look at what price did when price break through this support level it came back up to re-test this level and now your support level is acting as your resistance level you can see right now price is unable to break past this resistance level which used to be the support level next the levels must be near the current price when you are marking a key level you don&#39;t want to be marking one that is way too far away from where price currently is right now like these two levels right here these two levels they are irrelevant there is no point in drawing them because we only want to draw the levels that matters rights now because remember too many lines will look too confusing for us so in this case what I will do is that I will just draw a support level right here you can see whether price comes down here it always reverse and hit back up and then I will also draw another resistance level right here so these two key levels are the only key levels that matter now that you have understood these four secret rules let&#39;s apply whatever you just learned through the charts so in this example I can draw a resistance level right here because whenever price comes back up here it always reverses so this shows us that that is multiple rejections so this is a very strong resistance level and the reason I draw it right there is because it is also near our current price it&#39;s not too far away like all the way up here right it is near our current price so we still have to take into account this resistance level and then you can also see it right here this is when price move away significantly from our swing height and I can also draw another support level right here because whenever price comes back down here it always reverses and this just show us that this is a very strong support level because there is multiple rejections at this level and at this point of time this is when prices finally broken through our support level and look at what price did it come back up here to re-test this support level which now act as your resistance level and guys I want you to know that this entire area here is your support area all right remember a support and resistance they are not just one line like this all right this entire area is support area that&#39;s why you can see when price comes back up to retest this it does not come up to retest like a level like this it came back up to retest an aerial so you can see price went back up and reject this entire resistance area which was previously supports here&#39;s another example you can see that there is multiple rejections right here because whenever boys come back down here it always end up reversing and heading back up come back down reverse and hit back up so and then there is also a resistance area right here right so it&#39;s clear to say that this is a resistance area and this is a support area because it fully just satisfy the rules that we just talked about but do you want to Mark a level that is right here no because that is not where price currently is so it&#39;s irrelevant it&#39;s way too far away from us right now it&#39;s ancient history it&#39;s dinosaurs all right so we do not need to care about this levers that are like 10 years ago or even one year ago I don&#39;t know a few months ago you don&#39;t need to care about those levels all right I really want you to focus on where Price is Right Now focus on drawing the the most recent key levels like this the only time when I will draw this support level right here is when price breakthrough this support level and it&#39;s like going down then that is when I will draw the support level but if it&#39;s not if you still within this consolidation within this area you should not be drawing key levels that is like way far away from the current price now that you have learned how to identify support and resistance levels how do you actually trade them glad you ask so in this example I have marked out a resistance level right around this area because whenever price gets up there it always gets rejected and hit back down so this is clearly a very strong resistance area so the first thing you want to look out for at this key level is to see what price is doing its price gonna break past this level or is it going to reverse and head back down at this resistance level so in this case price actually gave us a Evening Star Candlestick pattern which is basically a reversal pattern that tell us that there is a lot of sellers in the market right now is no longer an uptrend and price is going to reverse and go back down and by the way there are literally like hundreds of reversal Candlestick patterns out there so you can just choose whatever you like but for me I just love the evening star Candlestick button because it&#39;s so easy to identify and I see this kind of stick pattern at this key resistance level that is the first sign that tells me that price is reversing but we do not want to enter here yet we don&#39;t want to enter immediately when we see our evening star we want to wait for multiple confluences right we need other confirmation that tell us that price is really going to reverse and head back down the next thing that I saw at this resistance level is the moving average crossover that is the next confirmation so you can see previously right around this area price has been above the moving average you can see all the candlesticks are just like above the moving average but right now at this point of time the moving average has crossed over so this is what we call the moving which crossover you can see right now the moving average is above the candlesticks now so that&#39;s the second confirmation that tell us that price is reversing so what I will do is that I will enter for a cell position right here when I see the moving average cross over the evening style reversal Candlestick pattern and price is at a key resistance level I got a three confirmation that I need so I will enter for our cell right here and I&#39;ll place my stop loss Above This resistance level here and guys remember you do not want to place your stop loss super duper tight like this because there is always a chance that price is going to go back up to this area and re-test it before heading back down so you want to give your stop loss a little bit of breathing room and if you guys know me you will know that I placed my take profit at the next key level so the next key level is all the way down here the reason I marked up this as a key level is because if you look towards the left it used to be a resistance level you can see right here it used to be a resistance level and now it&#39;s probably going to act as your support so that that would be by take profit and as you can see the trade literally went down and smashed our take profit and right now you have made a whole lot of money don&#39;t worry if you still do not get it here&#39;s another example you can see that right now price is at this major support area right here but we do not want to enter immediately when price is at this support level we want to wait for our confirmation we need three confirmation before we enter for the trade and right now we only have one confirmation which is prices at this support level that&#39;s the only confirmation that we have so we cannot just enter based on that so right now we still be patient and wait so you see like right now the next Candlestick price shown us is a bullish engulfing Candlestick a big fat green Candlestick at this support level what does that mean that means that there is a lot of buyers at this key support level pushing the price up this show us that price is not going to break fast this strong support level and that&#39;s a second confirmation the third confirmation is this moving average cross over you can see at this point of time the yellow line the moving average is going to go below the candlesticks now so now that we have our three confirmation I will enter for a buy right here and I&#39;ll place my stop loss once again below this support level and I can&#39;t really see because my camera is in the way up so I&#39;ll place my stop loss below this key support level and place my take profit all the way up at the next key level which is this resistance level right here and once again I marked up this resistance level because if we look towards the left you will see that it used to be a support level right here whenever I come back down here it always reverses come back down reverses so it used to be a support level and right now I&#39;m expecting it to become a resistance level now let&#39;s look at how this trade will play out I&#39;m just gonna fast forward this thing so that I don&#39;t waste your time and you can see like price just going up and going up going to our take profit and we just wait be patient and Bam we just smashed our take profit right here boys and we have close D3 great yeah it&#39;s really just as simple as that like this video If this video was helpful and smash on that subscribe button and if you want to take this strategy to the next level you need to combine this strategy with candlesticks and you can check out how to do that in this video right here welcome to the tribe and remember you&#39;re just one trade away [Music]

Transcript for:Drawing Support and Resistance Levels

Transcript for:
Drawing Support and Resistance Levels