Best Support and Resistance Strategy _ Strike Trader Elite System
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00:00Okay, before we get into more
00:03Settings adjustments like what settings you can use for different time frames and different currency pairs
00:10Let's get into support and resistance in a very simple way that I think
00:16Anybody and everybody at any experience level in trading?
00:20should be able to
00:22go in and
00:24Analyze the market on the weekend or getting into you know periods or the market slow
00:30to do an ongoing
00:32organic campaign of
00:35ongoing support and resistance tracking
00:37So what I typically do I do it. It's very easy. I use two charts
00:43I use the 4-hour chart the h4 and I use a daily on
00:48Occasional go see a monthly chart and see I mean a weekly chart and see where there's some really big
00:56You know multi-year key
00:59Levels but it just in general week after week the two charts that I always use for for core
01:06support and resistance tracking are the h4 chart and the d1 the daily and
01:12How do I do it? Okay, I
01:15take a colored line horizontal line and I start paying attention to obvious areas of
01:22Clustered support where there's been multiple instances of price
01:27Attracted to an area and
01:30That area appears to be holding
01:32All right right away. Let's look at where support was on this chart
01:38going back here into the month of
01:42September of
01:442017 we can see there was the big sell-off and
01:48We have price
01:50bounced off this area
01:52Consolidated a bit and then traded higher
01:55So
01:57So let's say I'm trading. I'm
02:00Getting ready to work some daily
02:02scalp setups and I happen to be in a day where the market is
02:09Trading back down to that area of price
02:13Well, if I already have that level tracked and I'm paying attention to it, you know
02:18That was a key area price had a huge move
02:21Stopped there
02:23Obviously was supported by buyers and that price was rejected and at no time going forward has price ever been able to
02:30Go back and check
02:33or I should say retest that area of support and
02:37Then suddenly on this particular day in January of 2018
02:42Prices down here testing pressing through that area
02:46So what would I be doing as a trader then?
02:50It's really simple
02:52When I see the market retest key areas that it's achieved in the past whether it's support or resistance. I
02:59Pay attention to that
03:01So how I set up my mt4 panel on my various screens is I have
03:08One set of screens that are all the key instruments that I trade. They're all the higher time frame charts
03:16Usually I'm paying attention to h4 charts
03:20Intraday on the weekend. I'll go look at daily charts and I'll make sure on my h4 charts
03:26I have key price levels that I've that I've tracked and I've determined on the daily chart
03:33Added to my h4 charts so I can see those key levels
03:39So in this case on a day where I see price coming down and literally touching that area of price
03:45If I'm on a lower time frame chart
03:47I'm gonna be looking for two types of trade setups as I'm trading the pound dollar as
03:55Price reacts to this price level
03:57I'm gonna be looking for on the 5-minute chart the 15-minute chart the 30-minute chart, whatever is my primary
04:05Chart that I go attack
04:07trade entries on I'm gonna look for
04:12growing momentum and
04:15looking for buy setups
04:18So I'll be slightly biased to buy setups looking for them on the pound dollar. I
04:24Want to see price leaving this area of obvious prior support and now being retested
04:32So that's the first thing I'm looking for
04:36So if I see price lifting during the day
04:40Intraday on my lower time frame chart. I'm going to be absolutely
04:44Excited about getting in any of these days as price is not at this point
04:52Holding and maintaining near this level of support
04:55I'm gonna look for price leaving that area and why because if price can't break through
05:01Smart money will be in here buying it and driving price back away from that level
05:07So that means I I have a high expectation
05:11That upside momentum could really run hard so I could get into a trade that could end up
05:17Being a 6 to 1 8 to 1 10 to 1 on my runners
05:22These are also
05:23Situations we're all tend to leave the whole trade on and try to get the whole trade
05:28To get 4 to 1 5 to 1 6 to 1 reward to risk
05:33In my opinion the two best ways to trade Forex are to trade price
05:41reactions to support and resistance and
05:44Trading out of news. So not trading right when the second the news hits
05:50but trading the high moves of more high momentum moves that are typically produced by
05:57Energy coming into the market as a result of a news event some country's GDP numbers
06:03some country's central bank interest rate news
06:08inflation numbers
06:09all the key main economic reports
06:12I would be looking for price on my lower time frame charts
06:17So in other words if I'm getting sell signals, I'm sitting on my hands
06:22If I see price holding at this price level or above and I'm getting long signals
06:28I'm more inclined to get in and attack those signals on that particular instrument
06:34That's reacting to a key support or resistance level
06:38The next thing I'm looking for is a breakthrough support or resistance
06:43What would typically be called like a breakout to the upside or a breakdown?
06:48Busting through support. So if we're breaking through resistance and running up in price
06:52I call it a breakout and we're testing support. We're chipping away through it and we start accelerating. I call that a breakdown
07:00Some people call both of those a breakout. Oh, well
07:05if I start seeing price chipping through and then
07:08Accelerating now. I'm looking for short signals and what I'm looking for is I'm looking for what's called range
07:16extension where price
07:18Extends its range until it starts consolidating again
07:23So usually you can get 80 to 100 pips on
07:27Breakthrough of support a lot of times you can get 80 to 100 pips
07:32Intraday on a bounce off support
07:35breakdowns have nice extensions
07:39Bounces have nice extensions whether we're bouncing off support or bouncing off a resistance level
07:46breaking through support or
07:48breaking out above resistance
07:51That's why
07:53Tracking support and resistance is critical. It adds a whole area of
07:59trade
08:00Possibilities that have a lot of energy in them
08:04so if I'm tracking eight
08:06instruments and
08:08I'm noticing that
08:09You know on one of the eight instruments that day is starting to react to a key support or resistance level
08:16I'm Johnny on the spot getting ready on my lower time frame charts to take advantage of a bust or a breakthrough
08:25Okay, let's go into objects list and let's get rid of these lines for a moment
08:31and
08:32How how do you track support resistance?
08:36Okay, what you can typically do I like to compress price
08:41So let's say let's let's just say this was the hard right edge of my chart and I wanted to start tracking
08:47Where I see key support resistance going from the right side of my screen to the left
08:54So right away obvious some areas I can see the highest point from right to left is
09:00This pivot right here now, we're on a 4-hour chart so that this is a prominent area
09:07Going back from that my first near-term area of support
09:13Right in here. I can see it was tested once somewhat tested a second time
09:18So this area so far any reactions to it
09:21That's gonna get me paying attention to my lower time frame chart
09:25If news hits and prices all the way up here touching this area, that's gonna get my attention
09:30I'm gonna look for a bounce down off resistance or a break out above resistance on my lower time frame charts
09:40Okay going back my next most prominent area where price traded and change directions
09:48So we see there's a bit of support here price came down
09:53Tested held and traded higher
09:56Going farther back from right to left
09:59My next area where I can very obvious obviously see price broke down held and lifted
10:05And you'll see this price tends to stair step higher
10:09It'll come back challenge areas hold or break through in this case hold and and trade higher
10:15Or trade lower as a markets breaking down
10:18Now here's an area I have a little node of support here a couple of retests
10:24I'm gonna go ahead and move this down right into this little cluster this whole area right here
10:30If I saw price in that area, I'd start paying attention to it
10:35Just below that I have another node and just below that I have another node
10:41So typically what I do on a four hour chart, I like to go back at least three to four months
10:47And then you know, even if like five or six months back, there's a huge
10:52You know area of a big and and that's another thing to pay attention to
10:56Very big like v bottom spikes where we have a big
11:02Trade down and then a big trade back up. Those are prominent same thing where you have a big trade back up
11:08A big trade back up. Those are prominent same thing where you have a big run up. It's rejected and runs down
11:15Inverted v's and regular v's v bottoms and inverted v tops
11:21Those are key key areas. You definitely want to be tracking on a four hour chart or a daily chart
11:30So going forward
11:32I see price comes up and it tested an area
11:36Now notice how this area we had is resistance it didn't hang out here for a while. It just pressed right through
11:44That's a breakout
11:45So on my lower time frame chart as i'm seeing price pressing through with no opposition to it
11:52That would have me looking for ways to get long on my lower time frame chart
11:59So, let's say several days later
12:01This is where i'm at and let's just say it's a sunday night going into a monday morning
12:06Okay, i'm going to go on my four hour chart and i'm going to track my levels get ready for the week ahead
12:12I see that this prior resistance busted
12:16And now I have a little bit of support right in this area
12:19Going back from that we had a pullback it held and the market ran up very hard from that area
12:25I'm going to indicate that area as an area of support that I want to pay attention to
12:30We had a lot of clustered activity it maintained this area price
12:34So I know there should be some support
12:37In this area of price that if it gets challenged again, i'm going to pay attention to it
12:41and the more
12:43test to an area and holds the more prominent it is and
12:49inverted v's and regular v bottoms mean something that means there's a sudden reaction where
12:57Counter you know buyers were in here driving it higher
13:01Buyers exhaustion hit and sellers immediately came in and rejected price sold into it
13:07Sellers are in control
13:09They exhaust buyers immediately come in by the area and reject price from that prior level
13:17So the same exercise that I just conducted on a four hour chart I do that on a daily
13:24The daily
13:26Levels, let's just go. Let's convert this to a daily chart
13:30Let's go ahead
13:32Let's leave the lines we had from the four hour chart
13:37And let me move this chart back now, let's take a look at
13:42We're on a daily chart now, so let's look at some of the levels on a four hour chart
13:47Okay right here this level as you can see
13:51Uh, we hadn't run up yet, so
13:54We were sitting right about like that
13:56So this was an area of support that was resistance
14:00And you can see these four hour chart levels typically line up with prominent levels on the daily
14:07So the more I look at this area on the daily
14:10I like this area a little bit better
14:13Because we had one two tests and then it took off
14:16Took off
14:18So a lot of times you'll see a lot of synchronization between the four hour and daily chart
14:26Sometimes on the daily you'll see very prominent, you know areas that were rejected
14:31Sometimes a bit more clear on the daily than a four hour chart
14:36Now you could theoretically just do all your support resistance tracking on just a four hour chart
14:43I like to have
14:44A look at the daily and the weekdays just making sure I see prominent levels and then what I do
14:50Is very very prominent levels i'll go on the four hour chart and just embolden the lines or color them a little bit different
14:57so when I see it when i'm
14:59In in the trade day trading and I kind of go reference my four hour chart
15:04I'm, like, oh, okay that that area up there that i've changed. Let's say change it to color red
15:09That's like the highest price
15:12That the pound dollar has been in you know, nine months so I need to pay attention that or a year two years
15:19You know from looking at the daily
15:23Now going forward as price played out price came down and tested support
15:29Pierced through a bit and lifted
15:31So if I see that rejection on a breakdown and it's lifting back through I would be on my lower time frame chart
15:38Trying to find ways to get into the uptrend
15:41and
15:43Okay price here pulled back
15:46On a daily chart and i'm sure in a four hour chart. I would indicate that as an area of support
15:53Now this was a beauty and I was I was actually a very active seller
15:58In my pam fund in this area price when we retested it. This was a gift
16:05price came out
16:07Didn't spend a lot of time above that prior level and was rejected
16:13Boy, you know on the daily chart. It could be seen on the four hour chart. It could be seen
16:19And on the lower time frame charts, there was plenty of opportunities to get into the downtrend and the downtrend actually
16:27continued to build and accelerate and grow momentum
16:32And literally came down tested that
16:35Support for a period of time and then broke through and accelerated
16:39through prior levels
16:41So making some adjustments
16:44So whenever we keep trading forward in time any lines that are broken through don't mean anything to me anymore
16:51So let's say i'm right here price breaks through that level and accelerates down. Okay, this level doesn't mean anything to me
16:59If anything i'd move this line up and call this area
17:03An area of resistance price came down tested support
17:07Challenge to lift a few times failed sold off
17:11Came down blew through support
17:13Okay, so that line doesn't mean anything to me anymore. That support is gone
17:18Price traded came right down tested perfectly tested once tested twice
17:24No big bounces and another thing. This is just like a door the more time
17:29You see price coming and knocking on the door
17:32Eventually that door is going to open and let them through
17:36So if I see the market testing testing testing and then it breaks through I jump on that break that breakdown
17:42Or if I see press price pressing pressing pressing resistance and then break through
17:47I jump on that breakthrough pulse move
17:50on my lower time frame chart
17:53So price broke through okay. Now i'm going to measure the resistance in this area
17:59Support broke now where was resistance as price is selling off that way if price bounces I know
18:06Where are my potential areas for resistance?
18:09And there we sit we've come down we've tested recent support and we're holding slightly above it on a daily chart
18:20So tracking support and resistance
18:23Is utilized to frame up the structure of the market
18:29And it's also utilized to help you intraday
18:33See price reacting to these key support resistance level
18:38Levels that you've tracked on a four-hour chart or a daily chart
18:42to to create
18:44opportunities
18:45To go look for directional trades on your lower time frame
18:49Hey price came up and tested. It's failing. It's rolling over
18:53On my 5-minute chart my 15-minute chart or 30-minute chart i'm looking to catch
18:59pulse moves pulse entries to the downside
19:03because i'm i'm
19:05I have a high expectation that the energy and price there's a lot of energy to the downside
19:11As price is leaving a rejected
19:14test of a key level
19:18And then the next area where I work a lot of my trades
19:23I'd say about
19:24in my typical trading
19:27I would say about 65
19:3060 to 65 percent of my trades
19:33are out of news releases
19:36so when a key economic report hits
19:39Usually four or five of the eight to ten currency pairs that we typically track are moving
19:45And they're moving with energy. Well, what does that mean follow through?
19:49That means when I get a trade entry
19:51I have a higher expectation of follow-through because the market hasn't been going sideways for the last
19:57Half hour it's moving with some authority
20:00That's when I want to get into trades that that's where I can get the bigger moves
20:05So if i'm not targeting
20:07trades
20:09As price reacts to support and resistance levels the predominance of time i'm working price action
20:15out of news releases
20:17And in the next video when I talk about news trading i'll tell you
20:22what's
20:23Kind of cool about going in and trading news
20:26And how efficient it can be
20:29So I just want to make sure
20:31Tracking support and resistance levels are important because they're trade opportunities
20:38And the next you know kind of key thing that I pay attention to is is price action out of news releases
20:45So now that i've covered
20:47How simple it is to track support and resistance?
20:51What charts to use now? Let's go over and talk about
20:55trading out of news events