All language subtitles for 3. How To Trade Based on Support and Resistance Levels

Hello and welcome back to cryptocurrency trading masterclass by wealthy education.

In this video, we'll talk about how to trade based upon support and resistance levels.

So the first thing that I would bring up is that the platform I am using is called Trading View, and

it is freely available trading view dotcom.

It's a favorite of traders around the world.

You have the ability to trade a whole plethora of instruments.

Depending on which broker you have it attached to and if for no other reason, people use it for analysis

just because the analysis is so good and then they execute the trades on whatever platform they are

using for their brokerage.

So in front of you, I have the platform itself, you can see I have a line chart of Bitcoin U.S. Teather

is the key for our.

So that means.

Every bar or every candlestick.

Is what happens over the course of four hours.

The line at Plotts, the clothes, every time, you know, at the end of four hours, it might be there

or it might be there, might be there up there, et cetera.

So support resistance is the first thing you're going to need to be able to identify.

If you are going to use any type of technical system support, resistance is.

The basis of pretty much everything that you do.

So support is exactly what it sounds like, it's where the market is supported, so, for example,

at a specific price here on Bitcoin, you can see 30000.

You know, if I see the market test this area but continue to find buyers and not be able to break through

it, that is considered to be support.

And as I'm sure you can guess, resistance is the exact opposite.

So it tries to break through and it can't and that becomes resistance.

Now, what causes this is a lot of volume, a lot of buy orders in this area or in this case, sell

orders so much that the buyers can't overcome the selling orders.

Or the sellers can't overcome the buying orders every time they push it down.

The buyers come back to pick it up.

The.

Platform has a whole host of tools on the Submenus here, but on this one trend line tools, you'll

see horizontal line, you click on that, you just place it on the chart wherever you want.

You can see there's a little bubble there in the middle, you can click and drag that and you can adjust

it to where you want it to be.

And just plop it on the chart like that, you can right click, go down to settings, you can change

the colors, the thickness or the type of line you can add text to it.

You can change the price.

And then the visibility just means that if you want to show it like, say, only on the daily charts

but not on the monthly charts, then you can click or unclick that.

So pretty straightforward stuff.

So what you're looking for?

For support and resistance, the first thing that I would say is if you ahead and remove this.

So let's go to the Daily Time-frame.

So.

If you look at a chart.

You can see that there are a couple of areas where buyers or sellers seem to be very active.

So, for example, right here you can see that.

You can see that buyers came in and picked up the market.

It tried to call it rally to try to halt, rally, try to fall, try to fall, etc. So when I go to

settings and I get a coordinated.

If I put in thirty thousand.

Gives you a good baseline for an area where the buyers may be particularly aggressive.

Now, why is this important?

Well, this is important.

Because you will find that the market remembers these areas.

For.

Support and resistance, meaning that, like when we get back there, the buyers came back in.

Obviously there's a lot of trading volume interested in the three thousand level.

So let's go ahead and change over to something else, let's make it like coin.

Together and you can see it's a little bit more of an active chart and this set up.

Right here, this is resistance, you can see that we tried to get above it, but I want you to notice

something and I'll go ahead and set the coordinates to ninety five.

Gives you a nice baseline.

I want you to notice something that.

We tried to break above there a couple of times.

Obviously, there was selling pressure there, but notice how once we finally did break out, when we

came back, there was support.

There is a saying that was once was support becomes resistance and vice versa.

I want you to think of it like this.

Think of a high rise.

And then think of.

All of the flaws.

And how they are constructed.

So if you take the stairs.

On each of these floors.

You're on the first floor and you take the stairs to the second floor, the ceiling, which was resistance,

becomes support now.

Do it again, the ceiling, which was resistance, now becomes support if you drop down.

Well, your support had been here at the floor of three is now the ceiling of two, it really works

like that and I'll show you.

Just take a look at.

These lines as I lay them out.

OK, so you can plainly see that.

This was resistent.

It was resistance a couple of times and then it broke through, became support.

This became resistance, broke through, became support.

This resisted a couple of times on this campus that we finally broke through, found support here.

Broke out to the upside.

It did have a little bit of reaction there initially, but then we pulled back to find support, we

rallied to find resistance.

Support and now it's acting like it may roll over and offer resistance.

These are not.

These are not accidents, these happen for a reason.

These happen because these places are where all of the larger order flow is.

And it is crucial to trade.

At these levels, instead of trying to basically just trade wherever, and the main reason for that

is that you want help along the way, you don't move the market.

So.

For example.

You can see that there's a little bit of support here, right around, you know, two twenty seven,

so I'd say probably two.

We could call that two and a quarter.

And Tasos.

So noticed something.

We come down there, the buyers come in, we come down there, the buyers command, we come down there,

the buyers come in and we bounce just a bit.

Notice on the sellers came in there.

We did break through it, but the sellers came in there.

Their buyers come in.

They're sellers come in that area.

So it increases the odds that you are trading with the market itself.

And by doing so, you increase your odds because you have other people in the marketplace moving right

along with you.

So if you take a trade here, you decide, hey, we're rallying right here is where I want to take a

trade.

Notice how you have to go all the way down here to find the buyers before seeing the market turn back

in your favor when you could have just simply waited for a reaction to the same level again, you know,

that way you don't have to put up with the losses.

It doesn't mean that it works 100 percent of the time.

Clearly, it does not, but it works most of the time.

You need to think of it in the sense of where the big money is trading bigger players than you are trading

at these levels.

Furthermore, you also need to keep in mind that it is not to the exact penny, so two dollars, 25

cents, it doesn't mean that if it hits two dollars, 24 cents, it's broken through support and it's

going to just fall apart.

You know, you.

Use this as a guidepost, you look for technical confirmation, some of the things that we will be talking

about in this course and then try to find them happening at these levels.

So, for example, one way to think of support and resistance is like a shooting range, an outdoor

shooting range and outdoor shooting range typically has.

An earthen mound and why does it have an earthen mound, because if it is like a piece of metal or even

concrete, you might get a ricochet.

Well, that's not how this works.

It can work like that occasionally.

But they will use a target and then they will use the earthen mound.

And depending on the caliber of the gun and a whole host of other factors, it may barely penetrate.

It may penetrate pretty deeply.

So think of it more as a range, you need to see whether or not it breaks through to the other side

in order to consider this split your support being flipped to resistance, for example.

And really the best way to do that is to wait for the candle or the bar to close.

And we will go through using those as well.

So, for example.

You know, we on this daily chart and Tasos broke above, you know, what I would consider to be the

three 20 level on this candlestick and we pull back and notice how it looks like we are trying to find

buyers here again.

You know, that's what you're looking to see.

And of course, there are multiple ways to go about this.

It's almost infinite.

But this is going to be the baseline for how you trade.

You know, you also would be better served to pay attention to longer term.

You know, I mean, you you can look at a five minute chart and try to find support resistance areas,

but they don't mean as much as they would on like a weekly chart.

And that makes sense because it takes a lot more time to make weekly trades appear on a chart as far

as reactions than it does a five minute chart.

This can just be simple noise doesn't mean it can't be done, but you have to respect the fact that

it's not as relevant.

A lot of times when you take a trade, you know, on a out and then you see that as a resistance in

the pullback and you see it as resistance again.

Well, if you take this trade here a lot of times at your target or if you take this trade here when

it pulls back, then you stop losses halfway between the two and your targets up here.

Or you can also do a type of trading where you recognize this as a resistance.

So once you break through this, you know, where of your stop losses to protect your your account,

you once you break through this, then you lock in some profit.

So you through here.

And then if you break through here, maybe you lock in a little bit more and then once you break through

here, you lock in a little bit more.

And then finally the market comes back and takes you out.

But it's a way of letting the market tell you when it's time to get out of the trade again.

Multiple, just unlimited ways you can use support, resistance, but you need to know where the market's

going to go or in this case, where it's probably not going to go, you know, it's probably not going

to break down in this region here.

And it didn't.

It went higher.

Knowing where it's not going can be just as valuable as knowing where it probably wants to go.

So in the next video, I'll show you some examples on how to use this support resistance concept to

make profits.