# The ULTIMATE Beginner’s Guide to SUPPORT & RESISTANCE

**Channel:** Mind Math Money
**Source:** https://www.youtube.com/watch?v=GnlTeRXyuaI
**Transcript page:** https://www.withtranscript.ai/video/GnlTeRXyuaI

## Chapters

- 0:00 — Course Overview and Learning Roadmap
- 3:18 — Defining Support, Resistance, and Flips
- 10:49 — Drawing Clean Support and Resistance
- 24:09 — Support and Resistance in Ranges
- 31:18 — Support and Resistance in Trends
- 42:55 — Signs That Levels Are Breaking
- 49:28 — Signs That Levels Will Hold
- 55:55 — Using Pivot-Based Support Indicators
- 1:09:20 — Auto Support Resistance Tools
- 1:13:44 — Course Wrap-Up and Next Steps

## Transcript

**[0:00]:** in this free video course you will learn everything you need to know about support and resistance for trading stocks cryptocurrencies Forex or any other Financial Market by the end of this course you will not only be able to use support and resistance like a pro you will also learn about multiple Advanced indicators that most Traders don't know about so hello everyone and welcome to this support and resistance trading course let's begin here by super quickly taking a look at what you can expect to learn from this video so first and foremost we are of course going to take a look at what is support and resistance in order to become a profitable Trader it's very important to have a good definition of support and resistance next we're going to take a look at something very important and that is how do we draw support and resistance like a pro and your ability to draw support

**[1:00]:** resistance correctly can be the difference between being profitable on a consistent basis and really struggling so make sure guys that you really pay attention to this chapter and I will actually separate this section into two different parts because we need to know how to draw support and resistance in ranging markets but we also of course need to know how to draw support and resistance in trending markets as well you know sometimes the market is in a trading range or in other words going sideways and sometimes the market is either in an uptrend or a downtrend and it's very important for us as traders to be able to draw out our support and resistance levels in both of these situations after we have a solid understanding of how to draw support and resistance we are ready to take a look at how to tell when support and resistance will break the SNR right here is simply

**[1:58]:** short for support and resistance and I will use this throughout the course but yeah understanding the signs uh that indicates when a support or resistance level will break is of course very important because it can be used either as a sign to exit your trade but you can also use these signs to trade breakouts so for example if you have some signs that indicates that a resistance level is about to break you can trade the break of the resistance and this is one of the most common and effective Trading strategies when it comes to support and resistance and after we have learned about some science that tells us you know when support and resistance will break we of course also have to learn about some signs how to tell when support and resistance will instead hold and another common trading strategy is of course to for example buy at a support level expecting the level

**[2:52]:** to bounce so it's super important to know about these signs last but definitely not least we're also going to take a look at some of the best support and resistance indicators and we will do this in trading view so if you are a more advanced Trader I think that this chapter will be super interesting for you guys but also if you are more of a support and resistance beginner if you watch all of the previous chapters

**[3:18]:** you will definitely understand the last chapter as well but all right guys we are ready to get started let's start with chapter one what is support and resistance all right so what is support and resistance well a support level is an area on the chart and this is very important it's often an area and we will talk more about this soon but it is an area on the chart where a stock or cryptocurrency or Forex power typically stops falling due to increased buying pressure so if you guys take a look at this chart right here the first thing you can notice is that I have marked up our support level at as a sort of Zone and this is because in real markets support and resistance levels will not be perfect lines they will pretty much all the time act more of as sort of zones or areas on the chart where the price is

**[4:15]:** likely to bounce so for example on this chart right here you can see that we have a support level which is this gray area right here and as you can see every time the price approached this sort of support level we actually saw a bounce so for example right here we had a very very strong bounce we saw another strong bounce right here and also the first sort of Bounce you can see that we had a small test here as well but if you take a look at the sort of last test here you can actually see that this right here was where the support level broke and when a support level breaks this can actually many times lead to a strong movement towards the downside and we will talk more about this later on in this course but for now you only need to know that a support level is a level where the

**[5:08]:** price typically you know stops falling but of course support levels will eventually break but what about resistance a resistance level is an area on the chart where a stock crypto Forex or you know gold or whatever you are trading typically stops Rising due to increased selling pressure so this right here is pretty much the opposite of a support level you can see in this case we once again have an area instead of a level and you can see that every time the price sort of reached this area we actually got a strong reaction to the downside so this right here is an example of a very good resistance level you can see we had one two and three strong pushes here towards towards the down side and we can actually see that the third push here was actually so strong that it broke uh the support level and another thing you can notice here is

**[6:02]:** that when the price when the price broke the support right you can see that we actually went up really quick here and tested the previous support as resistance and this right here is a very common principle and that is what we're are going to talk about in the next chapter so now we're ready to talk about a super common principle in trading and that is that support can become resistance and of course the opposite is also true so resistance can become support but what do I mean by this well when the price Falls below a support level the same level can later on flip and act as resistance in the future so if you for example look at this chart right here you can once again see that we have a very sort of clear support level you can see that we had sort of one clear touch right here we had two clear touches

**[7:03]:** three clear touches but then right here we saw a massive massive breakout and as you can see right here when we break support and see a very strong candle this right here by the way is what we call a momentum candle when we see lots of momentum like right here when a support level breaks this often indicates and sort of confirms that the support level was at actually significant because when a significant support level breaks it's common that the volatility will increase and that the breakout will be violent so in this case you can see that after the breakout the price continued to fall down here but eventually the Bulls got control once again and the bulls actually managed to push the price all the way up to the previous support level but when we reach this area the support flipped to to become resistance and after this the price completely collapsed to the downside

**[8:05]:** and now you might of course wonder why does this even happen well this principle can happen because Traders and investors sort of rememberers the level and another important reason is that they potentially have trading orders around this level so remember when we have an important support or resistance level it's very common that Traders place a lot of orders around this level so for example let's imagine that you are a buyer and you bought right here why did you buy well you bought because we approached a support level so you expected a bounce you expected the price to go up from this point but unfortunately the price went completely in the other direction the price broke the support and later on in this course we will talk about some some signs we actually saw lots of signs here that a potential breakout was imminent but let's imagine that you bought right there after this strong red

**[9:09]:** candle you are now in a losing trade and the price continues to go down and you are just losing more and more but eventually the price finally starts to go in your favor but remember you are still in a loss and all you can think about right now is that you know if I can only make back my money I would be happy and at what point do you actually make back your money well once the price reaches this point right here once the price reaches the level remember this was the level you entered you are finally not in a loss anymore so many Traders will take this as an opportunity to you know get out of the trade and sell at a plus minus zero and when Traders take profits this leads to selling pressure and yet another reason for selling pressure is because many Traders remember this is a very clear level it

**[10:07]:** was a clear support many Traders knows about the principle that supports flips to become resistance so it's not uncommon that many Traders H goes short or in other words bet against the market at this point and when you go short you're actually doing something called Short Selling and this right here leads to even more more selling pressure uh so this right here is two reasons why we can see selling pressure coming in what you need to do in order to understand the principles of support and resistance is to try to think about it uh from the Traders or investors perspective all right so now when we have a basic understanding of what support and resistance

**[10:49]:** is we also have a basic understanding of the principle that support can flip to become resistance and so on and so on now we are finally ready to take a look at how to draw support and resistance before we take a look at how to draw support and resistance correctly I actually want to show you guys an example of how to not draw support and resistance and I want you guys to take a look at this chart right here later on in the course I will show you guys this exact chart but with a sort of proper support and resistance drawings but for now this right here is an example of how to not draw support and resistance if you want to you can feel free to comment down below what is the big mistake that is happening on the chart right here feel free to pause the video and drop a comment well the

**[11:40]:** big mistake here and this is a you know very common mistake especially for beginners is that we are having way way too many support and resistance levels you can see we have so many levels on the chart that you know when we have these many levels we can't really do anything because we have support and resistance levels everywhere and this can give us something called paralysis by analysis meaning that we're having way too much information on the charts and it makes the chart harder to read it's important to remember that our goal with technical analysis is to make the chart easier to understand and easier to read so when the chart becomes harder to understand or harder to read we know that we are probably making a mistake here so for example let's imagine that you are a Trader and and you are at this point right here uh at first glance this actually looks

**[12:34]:** like a pretty good trading opportunity why well well we see lots of selling pressure here coming in at a resistance you can actually see that these two candles you can see the this green candle and the red candle also prints something called a bearish engulfing pattern and a beish engulfing pattern is a Japanese Candlestick pattern that indicates a reversal to the downside so here we have two bearish signals we have a bearish engulfing pattern and we have a resistance level so we basically have two reasons for a potential short sell but because we have so many lines here on the chart you might actually hesitate to take this trade because you can see after this uh engulfing pattern up here you can see that we only have a little bit of room here before our next support level so at this point you might think let's not take take this trade because we have a

**[13:30]:** support level right here so because you had too many levels on the chart you did not take this trade but if you actually look at how this trade played out you can actually see that this was the beginning of a very large move towards the down towards the downside and you would have made a lot of money but now let's actually switch the attention and take a look at how to actually draw support and resistance levels and what you can notice right here is that the chart I have on the bottom is actually the exact same chart as we recently looked like but as you can see in this case uh the chart is much cleaner and much easier to read so in order to draw support and resistance levels correctly I actually have a support and resistance formula that I use to find my support and resistance levels and we are going to talk

**[14:22]:** about this formula step by step very very soon but before we dive into this formula I I think it's important to just mention that when it comes to support and resistance uh pretty much all Traders have slightly different methods so there are not only one correct way to draw support and resistance you can have slight variations on how you draw your support and resistance levels but there are some uh principles that pretty much all Traders agree with uh the first principle is what we talked about earlier that if you draw way too many support and resistance levels this will only make the chart harder to read and it will be harder uh to make your analysis so that is one principle but now let's take a look at some other important principle uh principles when it comes to draw your support and resistance levels and the first principle I'm doing is that you want to

**[15:19]:** zoom out so when you are trading and you're getting you know too close to the Chart it can be super easy to you know try to over analyze everything if you really try to you can you can find levels that looks like potential support and resistance pretty much everywhere so that is why the first step um in my formula to draw support and resistance is to zoom out take one step back from the chart and try to identify the levels that are super clear on the chart and that pretty much all Traders can see the next step here is you know pretty much what I recently say said what we want to do here is that we want to only draw the most obvious levels so for example if we take a look at the chart we have right here we can see that the upper resistance zone is you know very obvious if it

**[16:14]:** if you zoom back you can clearly see this resistance we had one touch right here and you know during this part we got multiple multiple tests of the resistance and the sort of final nail in the coffin was this very strong reaction on the resistance area to get a strong reaction uh like we saw right here we need to have either lots of sellers or you know smart money stepping in and selling so this is a great indication that we're talking about a strong uh resistance level and the same thing is true with the support we can see that we have a pretty obvious support here right here we can see that the level got tested multiple times and we can also see that the last reaction here was a very strong reaction towards the upside so that is a good indication that we're talking about strong support and we can also see here that

**[17:05]:** after the sort of we had pretty much a crash right here we can actually see you know where did the buyers step in well buyers came in multiple multiple times at the support level so this is yet another obvious level here on the chart and we are actually very soon going to take a look at how this chart actually played out in the future uh so stay tuned for that but before we do that we have some other rules uh you need to pay attention to this third rule here we have already talked about actually and that is that we want to draw zones uh at least in my opinion it's preferable to draw zones and not lines and the reason for this is that if you draw lines on your chart uh it's easy to sort of think that these levels have to be perfect and if you draw lines on the chart you

**[17:56]:** will of you will realize that many times the price will go either a bit higher or a bit lower support and resistance levels will pretty much never be perfect levels you know perfect lines on the chart most of the times they will be zones so why not draw zones instead of drawing lines and we will talk about later on in this video uh how we can draw our zones here correctly and last but not least and this is super important and this is also a principle that I think that many uh Traders especially you know Educators on YouTube uh and so on and so on actually have wrong and that is that strong bounces or reactions are more important than many bounces and reactions so for example if you have watched other videos on YouTube you will hear that many people say something like this they will say that you know the more touches we

**[18:55]:** have on a support level the stronger the support level becomes and from my experience this is not really true actually we will talk about this later on in this video sometimes multiple uh reactions of a support can actually be a sign of weakness and we will talk about why uh but in my opinion what we want to look out for here rather than many bounces is that we want to look out for very clear and strong bounces on the support or resistance so I really prefer to see strong and clear B bounces compared to sort of weak and many bounces and why is that well a strong bounce let's say a strong Bounce from a support level that indicates that we are really seeing buying pressure at that level but if a support if if the price comes down to a support and you only see a tiny tiny bounce that movement is more likely

**[19:54]:** to be random because in order to see a tiny tiny Bounce It could actually use be normal Market Noise Okay so we have been talking about this resistance right here as a very clear resistance we have been talking about this support right here as a very clear support uh but what about this level in the middle and this one is not as clear in my opinion but this is still a you know valid level that I decided to have on the chart here and the reason for this level is because this was a level where we saw really clear touches so for example first of all we saw a touch right here this touch was pretty clear we saw a strong movement up and a strong reaction but at this point in time it's not really enough to draw a you know resistance or support then we can see that the price came down here

**[20:44]:** you can see we sort of tested this one uh the resistance flipped to become support but this this was once again not really too strong touches so still at this point I would not really draw the level but but when we saw when we saw this final very strong reaction of this level as a as a resistance now we have at least two very strong A reactions as resistance right here and we also have two smaller ones as support so at this point I think that we have enough information to actually include this level on the chart all right so now let's open up this chart in trading View and see how these sort of support and resistance levels played out but real quick before we do this I just want to give a quick shout out here to trading view uh trading view is the charting program I use for all my technical analysis

**[21:40]:** and in my opinion it is the best tool for both beginner Traders and more advanced Traders and if you guys for some reason don't use trading view yet I actually have a special link that will be available both down in the description and the top comment of this video and you can use that link to try out trading view premium for free for 30 days and after the free trial you can either decide to go for the trading view free version a trading view has uh a very good in my opinion free version cost nothing at all uh but if you decide to upgrade to a Premium plan after your free trial uh when using the link you will also get a $15 bonus and at the same time you will help out the channel but all right guys so now let's take a look at how this trade played out and let's begin here

**[22:31]:** by focusing on the middle line right here remember that we included this level because we saw a strong reaction right here we saw two small touches right here and then we saw yet another strong reaction after all of these points we had enough information to sort of include this in our chart and what we can see is that once again the price came down right tested the support the price came up and once again we saw selling pressure coming in at this level and you can even see that the price tested it one more time it tried to break above we even saw this sort of massive Wick all the way down here but the sellers managed to push the price once again holding the resistance but eventually we saw this massive massive breakout right and you can see that this breakout even pushed above uh it even pushed above this key resistance level and

**[23:30]:** as you know from before when we see a break of an important level this can lead to even more buying pressure because we have lots of orders around that level so you can see that after we broke this important resistance the price just continued to you know push Higher and Higher and Higher and we can actually see here that this was actually the beginning of a sort of uh this was actually the beginning of the Bitcoin Bull Run you can see this breakout all the way down here a break of a key resistance was the beginning of this massive massive run but all right so now when you know the formula for drawing support and

**[24:09]:** resistance we are ready to take a look at more specifically how to draw support and resistance in ranging markets later on we will also take a look at how to draw support and resistance in trending Market as well uh and that is of course also very important uh but let's begin here by range in markets and ra ranging Mar markets is as you can see here it's pretty much when we have the price going sideways it's not in an uptrend it's not in a downtrend it is in a range and the very first principle here is that we want to identify the extreme highs and lows of the range so once again we want to focus on the sort of edges of the range we don't really want to focus on the middle of the range it's possible uh as we talked about before to find some kind of support and resistance in the middle

**[25:03]:** but it's more important the first step is that you want to identify the high and lowest point of the range The Next Step here is that we want to adjust our support and resistance zones to include as many significant touches as possible and once again remember from earlier in the video that it's more important to have significant touches than to have many touches but we still when we draw out our support and resistance zones we still we first want to draw out the zones and then we want to adjust the zones so that we include all the significant touches and I will show you guys a real example very very soon and the third rule here is that support and resistance levels also exist within ranging markets uh I have already mentioned this they can exist within the markets but they are often less significant so when we are trading trading ranges we are often

**[25:59]:** focusing on either trading breakouts so we focus on trading when the price either breaks above or breaks below the range or we focus on trading support and resistance holding so we are trying to trade a bounce of a support or a reaction of a resistance it's much more rare to try to trade inside the trading range because the price action inside of trading ranges tend to be pretty random however there are exceptions uh like the example we looked at just recently where we can find significant levels inside the trading range and we can actually also trade these levels all right so now we are once again back in trading View and here on the chart you can see that we have a sort of trading range right we can see that we are neither in an uptrend or a downtrend the price is simply going sideways here so how do we mark up this trading

**[26:55]:** range and draw our support and resistance levels well the first thing you want to do here in order to draw a support and resistance Zone you want to head here to trading view you want to go to the upper left corner and you want to press on geometric shapes right here then you want to go down here and you want to use this tool called rectangle and remember from the rules here what we want to do here the the very first step we want to do is that we want to identify the extreme highs and lows of the range and in this case uh I think the are very clearly visible you can see that we for example have a clear high right here and we have another clear high right here so it's pretty clear that this is the extreme high point of the training range and now when we draw out our oops

**[27:44]:** uh let me choose the rectangle here when we draw out our zones what we want to do here is that we want to first of all include uh you know the very highest point of both of these touches so we draw the line uh we draw the Sone something like this uh but what we also want to do remember that I said that we want to adjust the the level to include as many significant touches as possible so what I'm going to do here is that I'm going to drag down the zone to this point right here and why do I do this well if I drag this Zone down you can see that I include all of these three touches right here and I also include this touch and also this reaction right here if you want to in this case we can actually make it a little bit more broader here to also

**[28:33]:** include you can see this strong red candle right here this is actually what I would do I would include that strong reaction as well uh so now we have our resistance then we can drag out our resistance here on the side um something like this so we have a trading range right here as for the support level it's a bit more tricky we can look a bit to the to the right here and we can see that we had this right here is in my opinion the most obvious touch but we also had a touch right here a pretty strong and significant reaction and you can also see that the price tried to hold on this point right here so when we draw our Zone we once again choose our rectangle Tool uh we are sure that we want to include this low right here so we include that low we also want to include

**[29:25]:** the lowest point of this move we could also include the uh green candle you can see the candle that bounced right there and then we draw our Zone to the right so this is how I would draw this trading range right here and you can also see that when the price is here in the middle of the range it's moves up and down a lot and it's very hard to trade so in this case we can't really find any clear level here in the middle a beginner Trader might have tried to draw a sort of level right here because they might argue that we have had some resistance we had some you know resistance right here and so on and so on they might also try to draw another line right here and perhaps another line right here and so on and so on but as you guys know from earlier in this video this

**[30:11]:** often just makes the chart harder to read and it will confuse you and make you take uh probably make you take worse trades and what we can noce about this trading range is that remember from remember from earlier in the video we talked about when we break a significant range like we for example saw right here we usually see a strong breakout or at least when we see a strong breakout that is actually a sign that this was a valid range so you can actually see this was actually a beautiful example because you can see after we broke the range we saw this you know strong move we also saw this strong continuation to the downside but remember here from earlier in the video that when we break resistance or I mean when we break support many times this level can flip to act as resistance in the future and this was actually exactly what

**[31:06]:** happened in this case you can see that the price came up once again to the previous support but the support flipped to become resistance right and we saw a strong reaction here to the downside all right so now

**[31:18]:** when we have a better understanding of support and resistance in ranging markets now it's time to take a look at support and resistance in trend market and this right here is super super important and the rules for drawing support and resistance in Trends is actually very different so make sure to really pay attention the very first rule we need to follow here in trending markets is that we want to focus on the most recent swing points and I will talk more about what a swing point is very soon uh when we draw our horizontal support and resistance lines so basically when we have an uptrend is if this right here is an uptrend what we want to focus here is that we want to focus on the recent swing high so for example this right here is a swing high this right here is another swing high this right here is a swing low and

**[32:12]:** this right here is a swing low and when we draw support and resistance in Trends what we want to focus on is that we usually want to focus in uptrends we want to focus on the recent swing high so we usually draw out our support from the recent swing High and then we're looking out for the potential bounce here remember resistance can flip to become support here in the future and this most recent uh swing high is much more significant than swing highs further back in the trend and by the way guys if you want to learn more about how to identify swing highs and swing lows correctly I actually have a full more than 1 hour long video about Market structure in that course you will learn everything you need to know about identifying Trends and so much more so if you have the time I highly recommend to watch that video after you

**[33:04]:** have watched this one the next rule here is that we we need to remember to adjust our support and resistance zones to improve the accuracy of these zones and this rule right here is pretty similar to what we talked about in the ranging markets and last but definitely not least when it comes to Trends we can also draw sloping support and resistance right so we can draw sloping support and resistance line and by doing that we can create Trend channels so we are also going to take a look at exactly how to draw your Trend channels but now let's jump back into trading View and take a look at a real life example all right so now we're back here in trading view we are currently looking at a gold chart on The Daily time frame and what you hopefully can identify right away is that right right here we have a you know very

**[34:00]:** clear looking downtrend and why is this a downtrend well as we can see we are printing consecutive lower highs so we have lower high lower high lower high and at the same time we're printing lower lows as well and when we are printing both lower highs and lower lows we are in a downtrend and in order to understand how to draw our horizontal levels let's actually use our replay tool here and take a look at how the market would have looked like at for example this point right here so if we are at this point in the market we can actually notice that we are in the very early stage of a downtrend why is this well we had one high right here and then we had a lower high so we had two lower highs then we had this low right here which is pretty much some sort of double bottom right here but

**[34:54]:** then when the price broke below the recent lows we actually know that we are in a downtrend because when the price reverses we will create a new low and this will be a lower low so we will have both lower highs and lower lows and now in order to draw our horizontal support and resistance levels remember from the rules here uh if we have an uptrend we want to focus on the highs but if we have a downtrend we want to focus on the lows so you can see that we have a low right here low right here here and one could actually also use this low right here so we use these lows to create our support and resistance Zone and once again we want to use the rectangle tool right here so the most important lows is this low and this low so we want to make sure that we include these lows

**[35:48]:** in the zone here and because we have a another low right here we can actually adjust our uh support or resistance Zone to include the most significant touches remember that this was another rule right here and what we then do is that we draw our level here to the right and the goal here is to wait for the price remember to wait for the price to potentially test this level this will not always happens but when this happens this can actually be good trading opportunities when the price tests this previous support to become resistance and then many times it will continue to push down so let's actually see how this trade played out you can see that the price indeed went up to the level you can see we got a strong reaction right here by the way this pattern you can see with this green candle right here and the red candle right here

**[36:49]:** this is what we call a bearish engulfing pattern so here we had a Candlestick pattern an important Candlestick pattern happening at a resistance level so in this case we had two two bearish signals happening at the same time and that can be enough to actually justify a trade so now let's play out the price a little bit more here you can actually see that the price once again you can see we've got a strong break here of the support so at this point we are definitely ready to draw out our new um support and resistance level and once again we want to include the most significant touches you can see in this case we have two touches we definitely want to include right here you can see we have one touch right here this is the low that was created the next low in the trend and we actually had another touch right here but

**[37:42]:** once again we can in this case actually adjust our Zone to include even one more touch because you can see we have yet another you know pretty significant touch right here and now we once again repeat the process so we draw our support/resistance here to the right and now we can let the trend play out once again you can see the price once again we went up all the way up here to the resistance level and once again we can actually see this pattern happening again you can see right here we had another bearish engulfing pattern uh you can see the sort of red candle right here and GES the previous green one and creates a bar engulfing pattern by the way guys if you want to learn more about Japanese Candlestick patterns I have a full uh course on Candlestick patterns so if you have the time I highly recommend to watch that video

**[38:39]:** after you are done with this one and actually when we are at this point when the trend have been starting to you know really develop here we can actually start drawing out our uh sloping support and resistance lines and to do this what we want to do here is that we want to focus on the high so we have a high right here we have a high high and high and then we want to use the tool right here you can see you press trend line toes tools and you want to use the tool called trend line and then what we want to do here is that we want to connect oh I don't know why it's a dotted line right here let me actually change this to a line and what we want to do here is that we want to connect as many highs as possible so you can see we can connect

**[39:27]:** these two we can connect this one as well and we can sort of try to adjust this level to include as many signif significant touches as possible but we can draw it something like this because now we include at least three touches you can see that one touch the touch right here is a little bit off but this will very often be the case you will pretty much never find trend lines where every single touch is exactly at the sloping support or resistance and that is why it's important to look at the sloping lines uh not as perfect lines but you should actually look at them more as zones so if you want to what you can do here actually is that you can press on the sloping line and you can copy this line and sort of draw instead of having a line you can try to draw a zone right here so in

**[40:21]:** this case this right here will be your resistance Zone and this is the area we EXP expect the price to sort of reverse the next time and to draw the trend Channel we can actually copy this line once again and in this case we want to connect the lows of the trend and once again if you want to you can create sort of a zone right here so now we have a resistance Zone defining the trend and we also have a support zone right here defining the trend when we have both a sloping resistance and a sloping support we call this a trend Channel and now let's actually continue to play this trend out we can see here that we once again broke below right we once again broke below key support right here so we draw out our support right here we drag the zone to the right and here you can actually see

**[41:15]:** that something very interesting happened here we actually for the first time uh in this downtrend we actually broke Above This previous support flipping to become res resistance so this right here is actually a sort of early warning sign that this trend might be coming to an end but you can still see that the price is respecting the trend Channel we drew right here we still got reacted here at the top of the trend channel uh but this break this break right here is a sort of early warning sign that this trend might be ending soon let's see how this played out you can see that once again we got down here and then the price finally broke above we finally broke Above This downward sloping uh resistance and we can also see that now we actually broke the high right here you can see we had a high and a high we broke that point

**[42:13]:** so now the sort of downtrend is over and when the downtrend is over it's important here it doesn't have to mean that the price will immediately reverse to the downside sometimes we will have a downtrend and what the downtrend is over the price can shift to for example go sideways after the downtrend uh it doesn't have to go up right after sometimes it goes down it shifts to sideways and then we can for example see another downtrend coming in after this shift but by now you hopefully have a pretty solid understanding of how to handle support and resistance in trending markets all right so now when we have a good understanding of you know how

**[42:55]:** to draw support and resistance in trading ranges and in trending markets now we're ready to learn about how can we tell when a support and resistance level will break so for example right here you can see that we had a strong break above a resistance level and now let's talk about what are the signs and what are the rules that indicate a breakout these rules are very important to understand because trading breakouts so for example buying when the price breaks above resistance can actually be a very good trading strategy but all right so what are the signs and what are the rules to look out for here well the first rule I'm looking out for is higher lows into resistance so if you take a look at this chart right here you can see that before the breakout occurred the price printed one low and then a higher low and then we printed yet another

**[43:57]:** higher low and when the price starts to print higher and higher lows before approaching a resistance this actually indicates a potential breakout and you may of course wonder why is this the case well let's think about this from a buyer's perspective if you as a buyer are ready to buy closer and closer to the resistance level the only reason you would actually buy here is if you EXP expect the resistance to actually break and you can also look at this from the sellers perspective remember here in order to have a strong support or resistance what we're looking out for here is that we want to see strong reactions away from the resistance like for example right here but when we start to see sort of very shallow and weaker reactions like right here this basically indicates that the sellers failed to push the price down and that with we are seeing lots of underlying buying

**[44:59]:** pressure close to the resistance so definitely look out for these higher lows into resistance and the opposite is of course also true you want to look out for lower highs into support so let's say that you know let's say that this right here is our support level and if the price starts to move something like this the first bounce was maybe very strong but as the price continued here we got we weaker and weaker bounces you can see in this market the sellers are willing to sell closer and closer to the support and the only reason they would would sell at this level is if they expect the support to actually break and also from a buyer perspective in this market it actually gets trickier and trickier to actually find a good buying opportunity here and why is this the case well you can see in order to buy here when we have so many

**[45:55]:** lower highs you can actually see that we have many potential sort of resistance level the buyer needs to push above in order to make a strong profit so this is yet another reason why lower highs can make it tricky for the the other side of the market and therefore this can often lead to pressure of a breakout the last sign of a breakout here is when the price really starts getting close to the support and resistance I usually call this that the price is hugging the support or resistance uh and this is basically when the price starts to trade very near or even at the support and resistance level so for example right here you can see that the price starts to get really really close to the resistance and this basically indicates that we don't really see a lot of selling pressure coming in and that is yet another reason why we could see

**[46:51]:** a you know strong breakout very soon so now let's take a look at the exact same example but now we are in trading view here uh I'm currently looking at ethereum on a 4-Hour time frame and let's start here by identifying our resistance level so first of all we can notice that we have a few pretty clear resistance touches right here you can see we had a strong reaction right here yet another strong reaction uh we can also definitely see this as a strong reaction here we have the other reaction this was the example we just recently looked at and right here was the reaction before the breakout so the very first thing we do here is that we use our rectangle tool to draw our resistance level and remember from the rules earlier here what we want to do here is that we want to include all the significant touches then we want to

**[47:45]:** sort of adjust the level in this case we can adjust the level all the way down to include this touch right here and then we drag the resistance to the right and this right here is actually a very clear example of the principle you can see that in the beginning we had these strong reactions of the resistance but after a while the price started to print one low higher low higher low higher low higher low and then eventually we saw this massive breakout and here and this is actually super interesting if we instead analyze this chart from a sort of chart patterns perspective we can actually see that this sort of pattern we have right here uh let me actually draw out a line try to include the touches right here if we look at this whole chart as a sort of a chart pattern we can actually see that this right here is what

**[48:42]:** we call an ascending triangle and an ascending triangle is a bullish continuation pattern meaning that it happens after a move towards the upside and it indicates a continuation here towards the upside so even the chart pattern indicates a breakout to the upside so if you really understand the principles of support and resistance you will sort of automatically understand chart patterns much better as well and by the way guys I have a full uh trading course about chart patterns so if you have the time I highly recommend to you know check that course out when you got the time but okay so it's very important to understand what makes a support and resistance likely to break

**[49:28]:** but it is of course you know at least as important to understand how to tell when support and resistance will hold so how can we tell when we are you know going to see a bounce of support or strong reaction of resistance and once again to understand this there are a few rules and signs we need to understand the very first thing I'm looking out for when it comes to support and resistance holding is that I want to see strong momentum to and quick rebound from the support so if you guys take a look at the chart here to the right you can see that we had a support touch right here we had another support touch right here and both of these touches showed you know strong momentum so the price went down very quick and it also went up really quick and in order to have a high likelihood of the support actually

**[50:26]:** holding what I want to see is for example this right here is a per perfect example because we see a very strong momentum into the support but also very importantly we see a strong momentum away from the support this is a very good sign and the opposite is of course also true for the resistance we want to see strong momentum to the resistance and a quick Retreat away from the resistance so here and here are two two good examples of this and the last thing here I'm looking out for is that I want to see little time spent at the support and resistance area so remember from the earlier signs we talked about a sign of breakout was when the price was sort of hugging the support or resistance and sort of hovering around that level so this is basically the opposite we want the price to just quickly come up to the support or

**[51:21]:** resistance and then shoot away and now you might of course wonder why does these signs indicate that it's likely that the support and resistance will hold well let's take a look at this bounce right here we can start by looking at this from a buyer's perspective one reason it's attractive to buy at this bounce is because the move before this bounce was so strong to the downside so on the way up here we don't really have any clear resistance you can see because the move was so steep you can see that the next clear resistance is not until all the way up here this makes it so the price can move freely and pretty quickly in this area and also if we look at this from the sellers perspective because we saw such a strong bearish move right here this means that the traders that went short from this reaction is now in a big

**[52:18]:** profit because when you go short you basically bet that the market will go down so when the price starts to bounce right here the profit of the short sellers start to decrease and because you know most Traders want to of course protect their profits and actually win the move towards the upside can lead to the short sellers start to lock in profit and what happens when a short seller locks in profit well this actually leads to even more buying pressure because when you exit a short position you basically have to buy back your stock so this leads to even more buying pressure yet another reason why moves like this often leads to support and resistance holding is because these kind of moves creates very clearly visible uh resistance and support level on the chart and when you have super clear support and resistance levels this means that many Traders will look at their chart and

**[53:18]:** also find these levels so many Traders will buy simply because we are at a clear support and this can kind of become like a self fulfilling prophecy people are buying just because other people are buying and this leads to you know even more buying pressure all right so now we are back here in trading View and here we can see a pretty clear example of strong support and resistance levels remember what we're looking out for here are these strong moves like right here where we see a strong move to and away from the support so right here we have had a very nice bounce here we had yet another solid bounce and right here yet another solid bounce so we can use these bounces to of course draw out our support and resistance and we want to make sure when we draw out our support that we include all of these touches and on the

**[54:13]:** other side we also have some very nice resistance Touches for example right here you can see strong move too and strong move away from the resistance uh right here we also have a very strong move especially away from the resistance here so once again we use our rectangle tool um we want to try to include all of the touches here so this becomes a pretty you know wide resistance area right here but yeah as you can notice here because we had such strong moves when the price went down this also makes it easier for the price to climb up after the move you can see that the price doesn't really have any clear resistance until it reach is this point and one interesting thing about when we find these sort of clear support and resistance levels is that many times many times we will actually notice that these levels have been significant even in the

**[55:09]:** past so if we extend this level you can see we extend this level to the right you can actually see that this level was pretty significant even in the past you can see we had a strong reaction right here strong reaction right here you can even see that it acted as resistance all the way back here and as for our Massive Resistance Zone we can actually also see that this level uh it's not precise but you can see that this was an area where the price struggled for a while right here and we also got reacted here before so many times it can actually be a good idea to look back even further and pay attention to the sort of historic significance of the levels all right so now the time has come for a chapter that I really think pretty much all of you will enjoy it doesn't matter if you are a beginner

**[55:55]:** or a more Advanced Trader because now we are ready to take a look at some of the best support and resistance indicators with that said before you watch this chapter especially if you are a beginner I highly recommend that you watch all of the previous chapters in this course because in order to be able to use these support and resistance indicators effectively it's very important to have the sort of background knowledge of support and resistance but now what are the indicators we're going to cover in this chapter well the first indicator we're going to take a look at is something called pivot Points highs and lows and this indicator right here can be pretty hard to use in the beginning uh but don't worry I will walk through step by step how to set this indicator up and we will also take a look at how you can change the settings of this indicator to

**[56:46]:** potentially make it even more effective the next indicator we're going to cover here is an indicator that finds trend lines automatically and this indicator will use the pivot Points we talked about recently it will use the pivot Points to make it its calculations so before you watch that indicator you definitely want to learn about the Pivot Point indicator first and last but definitely not least we will take a look at an outo support and resistance indicator and once again this indicator will also use pivot point in its calculations so it's important to understand the Pivot Point indicator and but this one can be a bit more tricky and there are a few settings we need to take a look at so make sure to really follow that uh chapter step by step all right so let's begin here by taking a look at our first indicator and at least in my opinion this is definitely

**[57:43]:** one of the best support and resistance indicators out there but the indicator can be a little bit complicated in the beginning and we will also need to change a few settings so make sure to really pay attention but all right so the very first thing we want to do is to open up a clean chart in trading view right now as I'm speaking I'm looking at Bitcoin on The Daily time frame but you can use this indicator on you know pretty much all time frames and now to open up the indicator we want to head up here to the indicators tab in trading View and what we want to search for here is pivot Points and then we want to type high and low just like this and as you guys can see we have multiple different pivot Points high and low indicators to use between uh but the one I prefer and this one

**[58:28]:** is you know often the most straightforward one is this one at the top simply called pivot Points high and low so let's open this one up and now as you can see multiple different high and low points has appeared here on the chart and the very very first thing I want to do here is that I want to go up to the settings tab for the indicator which you can find right here uh we want to make sure that we navigate to the inputs tab and for the pivot highs and pivot lows I actually want to change the color just like this and I want to make the text white here so just do a quick change like this so that we can see our pivot Points more clearly and these points right here which you can see on the top is what we call pivot highs and the opposite is also true so all

**[59:19]:** of the points that are lows here are simply called pivot lows and now before we change the settings of this indicator to make the pivot Points more significant um we of course first have to understand what is a pivot point in the first place so what is a pivot point well in very simple term a pivot high or low is basically a Candlestick that has lower highs to the left so before the candle appeared we want to see a lower candle but we also need to see lower candles to the right so if we have a candle formation that looks something like this you can see we have a high we have a higher high and then we have a lower high then this candle right here would be a pivot point with order one but if we have another candle with a lower high to the right and yet another candle with a lower

**[1:00:15]:** high to the left then this right here is still a pivot point but now we are talking about order two and so on and so on so in simple terms pivot points are basically significant highs and lows in the market and now when you understand this you will understand how we are going to change the settings here so first of all if we take a look at the chart right now you can see that we have tons of tons of pivot Points you can see we have one here here here you can see multiple multiple pivot Points on the chart so to make the pivot Points more significant what we need to do here is that we need to go up once again to the settings tab for this indicator and you once again want to make sure that you are on the inputs Tab and now I want you guys to pay attention to

**[1:01:02]:** this pivot high and pivot low because these right here are the settings we can change to make the pivot Points more significant but first of all if you for example change all of these settings to five this basically means that in order to have a pivot point we need to have five candles to the right and five candles to the left so if you for example change to five here you can see that we have tons of tons of pivot Points on the chart and when we have this many pivot Points the actual points are not significant so this is not very useful what I like to do here let's actually go up to the settings tab once again what I like to do is instead increase the length of the pivot Points when we when we do this you will realize that the s that the pivot Points will be so much more significant

**[1:01:51]:** so if we change all of these settings here to 20 you can see that now on the chart only the most most significant high and low points will appear and now you may of course wonder how are pivot Points related to support and resistance well as you guys now know from earlier in the course the significant support and resistance levels are usually created by strong either strong bounces or strong reactions so we can actually use these significant pivot highs and pivot lows to find significant support and resistance so what I like to do here is that I like to look back historically on the chart and try to identify areas where we have lots of pivot Points so for example if you take a look at this area right here you can see that we have an area where we have both multiple pivot lows and multiple pivot highs when we have so many significant

**[1:02:51]:** pivot highs and pivot lows at the same area that means that it's likely that this is a you know very significant level so these levels I really like to mark up on my chart and as you guys know we like to use the rectangle tool here and then we draw out the support and resistance I try to draw out the support and resistance to include all of the pivot Points so as you can see the support/resistance would have looked something like this and as you guys can see this right here was an amazing support and resistance area we saw multi multile multiple bounces both as support and we saw multiple reactions uh as resistance as well and we can actually use our replay tool here so let's just imagine that chart was right here you can once again see that even before the sort of uh the sort of upcoming bounces came we already knew

**[1:03:45]:** that this was likely to be a significant level why well because we had not only one touch two touches but three significant Touches at this area and let's see here if this indicator finds any other significant levels well we look up a bit here and once again we can see that we have multiple significant pivot lows around this area um and we had you know a pivot high right here and once again some pivot highs right here so this make it likely that this right here is yet another significant level so what we do here we try to draw some sort of U resistance level to include all of these points uh it will be a pretty broad one but we want to include as many as possible so something like this so this area right here is actually you know it's likely that we're talking about a significant area and if we look a

**[1:04:40]:** bit more to the right here we can actually see that it was when Bitcoin finally managed to push above this area this right here was actually the beginning of a massive massive uptrend all right guys so now it's time to take a look at our second indicator and what I recommend here is to actually combine this indicator I'm going to show you guys with the Pivot Point indicator we already have on the chart so if you didn't watch the chapter about the previous indicator I highly recommend that you watch this one before you watch this one but the indicator we're now going to use is a trend line indicator and the important thing about this indicator is that it uses pivot Points to sort of calculate and to find the trend lines but now guys let's take a look at how to open up this indicator so once again we head up here to the

**[1:05:32]:** indicators tab in trading View and now we want to search for Quant like this and then you want to search view so Quant view here is the Creator and as you guys can see Quant view has created multiple multiple indicators many of these indicators are pretty solid uh but one of the more popular ones is this one right here called trendline pivots so let's open this indicator up and in the beginning when you first open up this indicator you might notice that not a lot is happening and that is because we need to change a few settings in order to make this indicator work together with our current pivot Points and remember that our P pivot Points is 20 to the left and 20 to the right we changed the settings in the previous chapter so what we now want to do is that we want to go up to the settings tab for this

**[1:06:28]:** new indicator and here we have multiple multiple different settings um that we can use to change up the indicator a bit here however to keep this to not make this video too long this video is already getting very very long here uh we're only going to focus on the most important setting for now and that is the pivot length you can see the number right here so currently the the Quant view indicator is using nine as their calculation period so they use pivot Points based on a length of nine to make its calculations but remember that we use pivot Points based on 20 so we want to change the pivot length here to 20 another thing you want to make sure make sure that you cross this show crosses right here because this one will show you guys when we see a breakout above a trend line um we can also actually change the color

**[1:07:26]:** of the cross line here so you guys can see more clearly uh just like this so let's just do some basic change of settings like right here and now we are ready to press okay and now as you can see this indicator actually automatically found a trend line based on this point and this point and you can also see that the indicator identified when the trend line broke so you can see this Green Cross right here basically means that we successfully broke a trend line and if you look back a little bit more here we can see yet another example for example if we take a look at this point right here you will notice that we identified a downward sloping trend line based on these two pivot Points and you can see that we broke out right here you can see the Green Cross and this was the beginning of a larger move here

**[1:08:15]:** up towards our key resistance level what you can also see if we look a bit more to the right here is that we have some trend lines that are still in play we have one upward sloping support created by this point and this point but you can see that so far Bitcoin is quite far away from this line so it's still yet to to be determined if Bitcoin will go down and test this level once again perhaps we will get a strong bounce coming in at that area uh but we have yet another we have a resistance area right as you can see if we zoom in a bit here you can see that we indeed have a resistance area created by this point and and this point right and this resistance line is also still in play and remember guys because we have two significant pivot Points at around this level for Bitcoin around

**[1:09:07]:** here this is definitely a level uh I'm paying attention to right now for Bitcoin a strong break Above This level is definitely something to pay attention to all right so last but definitely not least we are ready to

**[1:09:20]:** take a look at our third indicator and also for this indicator I actually recommend to use it in combination with the pivot Points high and low and you can also if you want to use this indicator together with the trend line indicator as well but now to open up the indicator we once again go up here to the indicators tab in trading View and now what we want to search for here is support and resistance and then I think it's called levels so support and resistance levels with breaks and the indicator we want to use here is the one at the top it's the one created by Lux algo uh Lux algo is you know pretty famous a famous creator of trading view indicators um you can see that this one is very popular by this number right here uh but we want to open this one up uh now as you guys can see

**[1:10:14]:** multiple different blue and red lines have appeared here on the chart uh the red lines here are resistance potential resistance levels and the blue lines here are potential support levels but once again with this indicator um we do want to change a few settings so we want to head up here and press on the Cog wheel the settings tab and here on the inputs you can see that we now have something called Left bars and right bars and this is basically it's it's a bit complicated I don't know why they don't call it pivot Points but this is basically pivot Points so remember for our two earlier indicators we use 20 as our length for our pivot Points so once again we want to change the settings here and make sure that we have 20 for left and 20 for right you also have tons of different uh customization settings here in the sty tab

**[1:11:13]:** uh but I don't want to dive too deep into the settings here so all you have to do for now is to change 2020 here so that all our indicator lines up well together so now the sort of first thing you can notice here is that now this indicator will actually find the support and resistance levels based on our pivot Points you can see that every single pivot point on the chart both pivot highs and pivot lows creates support and resistance so now when you have changed the settings here for this indicator you can actually if you want to we can take away our our Pivot Point indicator here because we will still have the same information here on the chart so once again again now we can actually delete our zones here so let's imagine that we just have this chart right here in order to find significant support and resistance levels we can

**[1:12:06]:** use the exact same method so now what we want to do is that we want to include as many lines as possible right so as many lines as possible we want to include in our support and resistance zones so for example in this example we have not only 1 2 3 4 5 6 seven you can see we have included multiple multiple pivot Points so this level have definitely been you know significant historically but another pretty cool thing about this indicator let's actually zoom in right here is that this indicator will also give you signals when pivot point breaks so what do I mean by this well if we take a look right here you can see that we have a significant pivot high and what you also can notice is that this indicator generated a bu signal when the price broke below that significant high and you can actually see that this Buy Signal

**[1:13:01]:** happened for example much earlier compared to the Buy Signal that came from this pivot high and this pivot High remember this Buy Signal is from the break of these two earlier pivot Points and many times this Lux algo indicator will actually give earlier signals compared to the Quant view indicator but sometimes the signals will actually be later for example if you take a look at this trend line which created from these two highs you can see that we got the break uh signal right here while the signal from Lux algo didn't come until we broke that high right there so the signal can also be delayed all right guys so this course is actually coming

**[1:13:44]:** to an end very very soon but before we wrap up here I just want to thank you all so much for watching if you guys did enjoy this course or found any kind of value the best way to show that and at the same time helping out the channel is by simply dropping a like on the video it just takes a few seconds and it helps out more than you think and also of course if you have any kind of questions or feedback please don't hesitate to leave a comment down below I'm trying my very very best to answer every single comments and last but definitely not least when you are ready to continue your trading year I highly highly recommend to check out this playlist right here in this playlist you will find all the educational trading courses I have made so far and I plan to make many more in the future so

**[1:14:38]:** yeah I hope to see you guys in another video very very soon but for now take care Chia Chow