SUPPORT AND RESISTANCE
• The criteria we look for to identify support and resistance levels:
1. Extreme swing high and low price has reached in recent times (1)
2. Multiple rejections
3. The levels are obvious and significant (2)
4. Move away was significant (Large candles)
5. The level has acted as both support and resistance
6. Recently respected or recently created (3)
NB: You don’t need all the criteria to make a level of support or resistance. You need only one
criterion to qualify the level, but the more criteria you can find, the better.
• Once price approaches this level, we can wait for three scenarios:
1. A rejection of this level
2. A breakout of this level
3. A false breakout of this level
• How to find support and resistance levels (EXPLAINED)
1. We look for the extreme swing highs and swing lows.
I mean the highest or the lowest points that price has reached in recent time.
2. We can take into consideration a level that was rejected a couple of times because multiple
rejections mean that prices reacted a couple of times to this level which makes it important
3. We look for obvious levels.
I mean that we shouldn’t make efforts to decide whether the level is a support or a resistance.
4. We look for a level that acted as support and resistance
5. We look for a level that was recently respected or recently created
• How to draw support and resistance levels (EXPLAINED)
1. Once you identify a level of support or resistance, you draw in one single line that covers
the most amount of touches and points.
2. Don't draw in massive zones, draw in smaller zones that cover the most amount of
touches and point
NB: By following the rule of drawing a solid line that covers multiple touches, you get the most
important skill a trader must learn to do.
• Pro tips when trading support and resistance
1. Pay attention to how price moved through the support or resistance level.
• Did it break the level with a large amount of momentum in the form of wide-range
candles, which probably means the level was significant.
2. Remind yourself that support and resistance levels are not actually a level but more of a zone
it’s very rare that price will come to a level and reverse the second it touches it.
• Quite often price will stop short of a level and then reverse without actually touching it.
Other times price will move through the level by a small amount before reversing.
3. To clean up the levels you already have on your chart by picking only the highest quality ones
this will ensure you don’t get distracted by low quality trade opportunities and will allow you to
focus on only the highest probability levels.
4. For drawing support and resistance is to use a time frame that makes sense for your style of
trading.
• If your favorite way of trading is scalping on the one or five minute charts then it doesn’t
make sense to use a monthly level of support or resistance for your trades since these
levels can often be hundreds of pips wide.
• Similarly if you’re trading on the daily or weekly charts then using a level you took from a
one minute chart will be insignificant when looked at from these higher time frames so
when choosing which time frame to draw your key levels on make sure it suits your
overall trading.
• Please note that the stronger and more accurate support and resistance are found in
daily and h4 time frame. Daily and h4 = Wicks = liquidity = zones = rejections.
