All language subtitles for 5. Support Resistance

All right, welcome to the lesson on support and resistance.

This must be the most fundamental aspect in your trading, right?

If you master one thing, I ask you to master support and resistance.

Right.

Because identifying important levels, which means knowing your support levels and knowing your resistance

levels, is the one key thing that will contribute to your trading success.

Right.

Because why this will tell you where the buyers are and where the sellers are.

And if you know where the buyers are and you know where the sellers are, you know where you're interested

in being a buyer and you know where you're interested in being a seller.

OK, so let's get started.

There are two main kinds of support and resistance levels there, horizontal support and resistance

levels, which are basic support and resistance levels.

And there are trend line support and resistance levels, which are the Agnel support and resistance

levels.

Now, typically, people tend to focus on the horizontal support and resistance levels and never really

get into the trend lines.

And they are both very, very important, especially in a bull market.

Right, because in a bull market, you are waiting for resistance trend lines to break in order to take

advantage of breakout trades, which can lead to a quick two to three in your profits.

OK, so let's start off by identifying some horizontal support and resistance levels.

So I like to map them out with the rectangle tool here.

Why?

Because it is never just a straight line.

It's not one specific price, like 85 cents.

Right.

It's a zone or an area.

This is a support and resistance area.

Right.

That's why I like to say levels.

Right.

So I'm going to draw the first one right here.

You can bear with me here and then I will explain them later.

I'd like to draw my support areas in green and my resistance areas in red here.

I'm going to draw my next support level here.

I'm going to draw my next support level here.

I'm going to draw my next support level right here.

You can see we had a big breakout rally here, we had some many supports, right?

So, you know, you have a support level right here and you can see right here as prices bouncing off

here, it even went down.

But listen, it was just a wake and that is the whole point.

Price respect's support and resistance areas in support areas.

Buyers are there.

That's why they're green.

They support price.

So when you come down into them, they support price.

Price bounces on them.

It finds buyers OK.

You know, you can see some of these levels.

You can extend them left a function as a support level before you can extend it even more, left it

function as a support level before.

Right.

Um, you know, these two weeks found buyers there.

And you can see currently we are we are at this little support level right here.

Right.

And let's go ahead and draw some resistance levels now.

So we'll start where we started.

So right here, let's grab our rectangle tool and let's make it red.

We have a resistance level right there.

We have a resistance level right there, right.

And, you know, this is the same level, right, because you stand is left, you can see that its price

was resist the right.

There we came and we finally broke through it.

OK.

We have a resistance level right here.

We have a resistance level right here.

And we have at the all time highs a resistance level right here because we have sellers there, resistance

levels is where you find the sellers, right.

And one thing I will tell you about support and resistance.

The main thing you need to know is that support becomes resistance and resistance becomes support when

it breaks.

And what do I mean by that?

When buyers are able to break a support level, it becomes resistance.

Right.

And you can see that right here.

Right.

Um, OK.

You can see price broken right here, right, and then came down to retest the level, but after I support

instead of finding sellers there, it found buyers there.

You can see we hit this resistance level, came down at support, then we broke through this resistance

level and we came down and found support.

Even though this was the Wick's you can see this price right here was held, came down.

And now we are here.

And let me take this magnet off and show you that if we grab this green rectangle and we extend it to

the side.

It was previous resistance, right, because this is a support level, previous resistance, so this

price came up here and got rejected once, twice.

Right.

Found support at this previous resistance.

So this one probably turns green at this point because price is finding support and we're trading above

it.

See how it held there, came through and broke this resistance.

And all this resistance is going to support any bedraggled left.

It was a resistance before.

And this is the way it always works.

Right.

Let's go through the rest of them and see how that phenomena played out.

Let me just get rid of some of these right here.

So here you can see this resistance level again, like we talked about, broke out and became support

because Price had a small pullback and found buyers there.

And then we had a big impulse rally and I got rid of this.

This is a support level because you can see one, two, three.

You know, some Wick's.

Six all these bounces there, but we just move this a little higher here, like I said, it's always

areas and drag it to the left.

This area was once resistance because we came up and formed a double top.

We rejected this twice, came up, rejected it one more time, but only slightly as we made higher highs,

finally broke it and then it became support.

Found buyers three times and then we rallied.

Once we clear the area, this is a consolidation area.

Right.

Um, right here is a similar thing.

Let me grab this.

This was a previous high rate we came up, we call the resistance, came down and found support around

this area right here, even though we had this fall's breakout.

But again, this could be your area.

This is the way it works, guys.

This is we're going to talk about stop loss and risk management later, but it's always an area again,

if you could draw this rectangle.

To the right here, you can see the price on rejection here and again, founder Justin here once, twice,

three times.

And again, when it broke, it became support, right.

Just like I did over there became support.

You can see price both through from buyers now instead of sellers and rallied up.

So this area would have been turned into a support area.

Right.

This has three bounces here.

This is a support level here.

And let's talk about this one now.

This was a support level here, but this one right here, right.

If we if we have this area right here.

And we draw to the left.

What was this prior?

This was a resistance, right?

You can see right here, if this was red, when prices here are coming up, I found one bounce, two

rejections, three, four, before it finally broke through.

So this was a resistance that turned into support.

Let me just zoom in so you guys can see that after we break support, it's now support.

And look what happened.

We came down into it.

You see it along with their.

What is that?

That's a hammer can again Hammer Kando is bullish with a little green body, a long lower rick, right.

On a support level, this resistance was nonsupport and it acted as a level where we found buyers.

So we came up.

Look what happened in this big sell off day.

This was, you know, probably a lot of liquidations, a big sell off, some kind of news related event.

But where that price come down to right here in his previous resistance does not support.

This is where he found buyers.

Again, support level shows you where the buyers are in the market.

So it's important to have them drawn out.

Again, found buyers there in all these bounces had a bit of a false breakout and found buyers again.

And then we rallied up from there eventually.

And the rest is history.

Guys, you go ahead and you raise this and zoom out again.

Let me clear all drawings here just right click remove drawings.

All right, so the next thing we're going to talk about is trend line support and resistance levels,

right?

I told you, there's two important types and the trend lines are even more important, in my opinion.

So you grab your trend line tool right here and you're going to draw in the same way.

A resistance level is a level the price respects, right?

So this one is a bit more abstract, a bit more artistic, you have to have an eye for it, right?

It's not a flat level like, you know, a horizontal level, but it's it's a trend line.

It's a diagonal level.

You can see I have this drawn out because price bounced out of here several times.

So this was a trendline resistance, right.

And guess what, in the same way, that price horizontal when you break a resistance becomes support

a trend line, when you break resistance becomes support.

So you go ahead and draw this to the right here.

You can see that when this trend line, when buyers were finally strong enough to break this resistance

trend line and turn the trend bullish if found support here.

Right.

So we go ahead and turn that guy green into guys.

Some of the most powerful stuff in all of trading is when you can combine line support resistance levels

with horizontal.

And again, we have this flat top resistance level right here with this bounce in this bounce.

And so when we were retesting here, we were retesting both levels.

And this is a very, very strong place to get involved.

You can see we printed a big bullish engulfing candle indicating to us that the trend was breaking out

again and starting the next impulse move.

Likewise, we had a trendlines support right here, you can see Price found buyers all three times.

Trendlines support.

Trendlines support.

Trendline resistance.

Trendline resistance.

Trendline resistance that became support right when we broke through here, we tested it several times

and then it converged with the line support and we rallied from there.

Trendline resistance right here, right?

That became support because you can see.

The lines drawn right here and has several touches, a lot of candles rejecting it, so we broke through

and rechecked it twice, tested it, support what happened here.

You can see, guys, the hammer can go from a far right there on the importance support level.

So we're combining candlestick analysis with support and resistance analysis.

OK, you see one right here, right?

You can see we have three touches, one rejection, two rejection, three rejections.

Right.

Three weeks up here.

We know the sellers here when we bounced off it again with three, four big red candles.

We know they're sellers here.

Then one big red candle.

We know they're sellers here.

What happened?

A hammer kind of showed us that the buyers came in and maybe this thing was getting ready to reverse.

And we did exactly that.

We reverse the trend.

We went bullish and we broke out and look again.

We came to retest it.

Right.

Resistance becomes support and we found buyers at this level, right?

This is all abstract, right?

You can drag this down a bit and see that we actually retested this area twice, even trendlines, because

areas.

Right.

You can see this didn't quite touch.

But in this area, we found buyers.

And what is that, a bullish engulfing candle?

Right.

You can see we have a bit of a hammer candle there with a red body inside.

Bucannon bullish engulfing candle.

If that wasn't enough and you wanted more confirmation, we broke the next one that you had there.

So you now turn that one green because now it should have the support.

And we printed another hammer candle and then a big green candle right again.

Happens over and over in all markets, right?

This was a resistance level that was red.

We broke through, retested, rallied, retested with several sell off weeks, rallied because we found

buyers in that area.

OK, and you can see right now, currently we have this big.

Trendline resistance area.

So we're waiting to rally from that and we can go ahead and draw this horizontal support area, right,

because this was what previous resistance, one bounce to bounce, three bounce.

We found settlers broke through.

We came back to retested.

And what happened?

A hammer handle.

It held for a little bit.

And we are squeezing now.

So we're going to see who wins here, the bears or the the bears or the bulls.

This is called a squeeze because we have our support level, which we know what our buyers are here,

and we have this red line trend line indicating where the sellers are and they're both meeting right

now.

OK, so keep that in mind.

And that is support trendline resistance, guys.