Original subtitles

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

I'll show you examples about how to trade support and resistance levels.

So in front of you, I have the Bitcoin chart and it's a simple line chart.

It just shows you and it adds to the line at the end of every day and draws a line like you have seen

and multiple other charts in the world and, you know, far beyond finance.

And, you know, so the question is, how do we use support resources to our advantage?

Well, the first thing is you click on this horizontal line tool and if it's not horizontal, then it

may look like a trend line.

Just drag it down after clicking on the submenu.

And we look for a place where the market seems to either fail to get above or fail to get below.

And I also like to look for round big numbers.

They start there.

So instead of 60 to whatever, that was six thousand.

Kind of take a look at it and you can see that.

Obviously, they were struggling to break it below there.

Eventually they did, and things got rather ugly for a while.

So Bitcoin struggled to get above there.

So let's take a look at 4000.

Click on that.

And then let's take a look at.

Nine thousand.

And so on, so I will go ahead and mark these at places that I think might be important.

Notice how we shot straight up there and then fell.

So that would be a resistance.

Notice how it was support all the way back here.

This is December of 17.

This is June of out of twenty nineteen.

So you can see 18, 19 months later, the market.

Remember that area.

Now, in that particular case, I suspect that people that bought here saw it rise and then saw it collapse,

you know, that's a massive collapse.

That's a ten thousand dollar loss per coin.

What happens is people hold onto those.

They don't want to get rid of them.

And then when they get back to that area, they are more than willing to sell to get out of break even.

You know, otherwise they they would have to realize massive losses.

So notice here.

All the way through here, we can draw that line here at seven thousand.

Notice how it affects the market a couple of times and then we continue to go higher.

We break above it, this nine thousand level comes into play again.

Thirteen thousand offered a little bit of resistance.

We didn't quite get there previously and then since then have taken off.

So this is twenty thousand.

This is 30000.

And this is 40 thousand.

So there's a certain amount of psychology involved in some of these figures as well.

There's nothing particularly special about 30000 other than the fact that it's 30000.

So large round figure.

But notice how twenty thousand matched up with the highs here.

That's where it close.

It actually reached towards 20000 on that daily chart.

And if you don't believe me.

There's the bar chart, you can see it actually got higher and then pulled back a little bit and we'll

go into bars and candles or specifically candles later, they tell you the same information.

So.

How do you trade this?

Well, it's pretty straightforward, really.

You are looking for areas that matter.

So again.

Let's make sure that we are at an area that matters and then we can place a trade.

So for example.

You can see.

That this was an area that the sellers could not break down below.

People are willing to step in and buy here, but I want you to notice how.

For starters, the market had been falling quite some time.

And then I want you to notice how this area seven thousand offered support, they came in a couple of

times, but notice this, notice that every rally, every time they try to push it higher, they struggled

a little bit.

We finally broke through there.

And this was your next kind of point of support.

And then wammo right there, that's where you really started to see the market take off and it had been

a grind lower.

So that's the first thing you need to keep in mind.

When the market behaves like this, you don't want to be a buyer.

It tells you that there's something wrong.

There's something seriously wrong with the price and it's going lower.

So with that in mind, this was a pretty straightforward trade to take you short Bitcoin.

Now, where are we going?

Well, this is an area that caused some noise previously at four thousand.

So that makes a perfect target.

Makes perfect sense.

With that in mind, you can also take a look like 5000 calls, a little bit of reaction.

So what I like to do typically is I like to have a target ahead of time.

If at all possible, unless it's a long term kind of investment, you know, you take the trade once

you are below, once you close on the debt, in this case, the daily, it doesn't have to be daily,

could be hourly.

But on the daily, once you are below six thousand, you sell, you aim for a target.

Where is your stop loss?

Well, your stop loss generally is going to be where you broke down from.

So.

That would be your initial stop loss, you hit your target.

That's a pretty straightforward trade, right?

So time goes by and you can see that four thousand continues to offer resistance and then we break out

to the upside.

So once you get a strong move to the upside, it's very simple thought process to put your stop loss

just under four thousand in this case, maybe thirty nine hundred.

And you aim for the area that was previous support should be resistance now.

And that's exactly where it went now.

It come it comes down to the individual trader, but a lot of times what they will do is they will look

for support.

Some type of area in the middle of this move, five thousand makes sense, it's a large figure and it'll

attract a lot of attention.

So they will move their stop loss to there and they will be out of the position if it turns around and

falls from six thousand.

Now, you have to be willing to accept the fact that you may give back some of the potential gains in

this case.

It worked out quite nicely for you.

Not only did you hit 6000, but you hit 7000, pulled back a little bit, found that to be supportive

as well, and then took off.

So at this juncture, you can have your stop loss just below 6000.

Now, you have absolutely a free trade at this point and did here as well.

Now you can really let it run.

You take your lines.

You see that we are breaking higher, you move your stop loss just below this area, you let it run,

it breaks above nine.

Keep in mind, these are all.

You know, until we get to about 13 and twenty thousand after 30 or 20000, then that's where we have

new lines.

So these are all lines that you would have been aware of, you know?

At nine thousand on a break of that, you could put your stop loss behind the most recent pullback,

then put a stop loss here at about nine thousand, your stop losses at 9000 and boom, you get taken

out here.

So that was a trade from thirty nine hundred to nine thousand and, you know, at one point you made

even more profit.

You could have been a little bit more conservative and move your stock back up when the first pullback

occurred, if that's, you know, if you didn't wait for it to break out.

But worst case scenario, you're talking thirty nine hundred to nine thousand.

Now, seven thousand had been important.

More than once.

So as you break above there, your stop loss, your beier stop loss.

Sixty nine or sixty nine hundred ish, you can see we take off, we hit the target, the nine thousand

level.

Again, you can move your stop loss above there.

It pulls back just a little bit and continues.

That's a good sign.

Boom.

You get taken out.

You did run into a little bit of trouble here and you pulled back, that's fine.

You still made something like 20.

2000 ish, maybe nineteen hundred on that coin.

You can also see you can make an argument for it, well, this is probably going to be resistance because

that's where we sold off from.

But nonetheless, it all works out the same way.

So you can see how this is like a roadmap.

So the question then becomes.

What happens if you take a train and it turns around, it breaks down against you, so let's say you

take this.

And you put your stop loss.

Somewhere around eighty eight hundred, it comes back and I take you out.

Well, what happens is your stop Stop-Loss works and it protects your account from a big loss.

You see the same action.

You get involved this time.

Your trade works and you go racing higher.

And you hit the 13000 target, and at that point you're looking at 20000, you made your stop loss up,

stop loss up.

You know, thirty thousand, you suspect, could be important for no other reason than, you know,

it's 30000.

Like I said, some numbers are just big figures.

The people pay attention to.

And so on, and here we are at 40000, we'll see how that plays out, pretty straightforward, really,

if you think about it.

A theorem, same situation.

You could go through and draw lines and I and I will do that right here, there's a lot of interest

in this area here.

So they pull up the horizontal.

Horizontal line.

There we go.

So let's call this 275.

And you can see support, support, resistance, so it's certainly in line that the market paid attention

to.

To what four hundred has to say, I like that, that looks good.

Six hundred.

This is another thing, too, that you will pick up on in some markets over time.

You'll learn that there might be a pattern, so anthurium, as I'm drawing this out, it's becoming

obvious that it's about a 200 dollar range between major support resistance.

Now, the one thing that you need to be careful about with support resistance is to not overdo it.

Sooner or later, you're going to come across somebody who suggest, you know, there's there's daily

support and resistance, there's weekly, there's monthly, there's five minutes, there's 15 minutes,

blah, blah, blah.

And that is true.

The problem is you'll see some traders go through with the monthly, weekly, daily, four hour hour,

half an hour.

And by the time they're done, the entire chart is nothing but lines.

You do have to kind of focus on the important ones.

And I wouldn't be too hung up on five minute support resistance.

What makes more sense is to use daily support and assistance on a five minute chart.

That way you can let the trade run a little further.

That's just a little bit of a hint.

So in this case.

The market had been finding support, you take a trade, you have no idea where we could go except for

maybe somewhere up here, around 600.

But as the trade develops.

You notice their support at 400, so when you take off towards 600, that's where your stop loss is.

You break above their.

You go to 800, that may or may not need to meet anything as far as criteria's concerned quite yet,

but you notice we pull back.

So you would expect some type of resistance there.

We come back to the support area.

You may or may not still be in the trade depending on how tight you left your stop loss.

Break out above 800, you put your stop loss a little bit below it.

Pull back ever so slightly and then break above a thousand, you know, at that point, that's a large,

psychologically important number.

So you figure it's going to act as something and it does.

And you probably get taken out.

It's pretty straightforward.

We bounce around a bit, we rally the most recent high as much less, and we break support, so that

is a negative sign.

So you'd be a seller stop loss just above the 1000 level.

You would target this support or resistance level for support.

Once you get through there.

You probably had taken out, however, you'll notice that when we rallied again, we could not break

above a thousand.

That's a good place to short sell it.

Put your stop loss in the same area you're aiming for this area.

You didn't really break through yet, but once you finally do, you put your stop loss in the same area

and you break down stop loss of there.

You break down to this one.

Probably not enough to get overly excited about moving the stock loss up too much.

The question is, do you want to put it up here?

Maybe.

Or maybe just about five hundred, just because it's a large number, maybe.

Either way, you get taken out.

Now, something that you may or may not have picked up on.

Is.

Like this trade here.

So we'll call this trade one.

They redraw this.

We'll call this trade one as short trade one, and that was when we broke through support and we aim

for this.

And you got below if you got stopped out.

Well, back up here, we found again, so this is trade to.

We came down here, we didn't really break through.

Brown slightly.

And then broke down and and finally got rid of the 800 support level, that's not that uncommon.

You know, you can shoot through support resistance.

You clearly can't in one shot.

But notice sometimes more often than not, it takes a couple of attempts.

And that's because this is an area that matters.

And when you see a couple of attempts and then finally breaks down, you almost always see that.

When we return there, there's a reaction.

So.

That means there's a lot of water flow going to break this down and there's a lot of support, there's

a lot of buying there, and once it finally gives way, that becomes a nice trending trade.

You know, it doesn't always just break through right away.

Keep that in mind.

A lot of times it takes several attempts, but those several attempts, that's tenacity.

That's the market telling you it wants to continue fighting and breaking lower.

So pay attention to things like that, that the market is continuing to attempt something that generally

means that sooner or later it's going to accomplish it.

In the next video, we'll take a look at how the trade based upon Fibonacci levels.