Support and resistance are essential levels for all traders in swing trading. Before one can start placing orders on the buy/sell side, these key levels will form the battlefield for buying or selling.
In the video above, I will show you how to identify the support and resistance levels for swing trading so that you can buy near the support and sell near the resistance to maximize our profit while keeping risk exposure low, to have a better reward to risk ratio.
Depending on your strategy, preference and personality, you always have a choice to participate the swing within the range or in a trend. Swing trader always aim to catch the swing low as early as possible and sell when the swing is ended.
Resistance becomes support level once it was broken up. Always extend the support level to the right and pay attention if the price respect the support level. Do treat support as a zone/area instead of single line/level.
Question. What criteria do you use to help identify when to "best" exit a position? For example, at 14:57 in your video, the DJI goes on a sustained increase through Sept. and most of Oct. How do you not "false alarm" around Sept 20th? There is a small dip, but does not last long enough to define a clear support line. It pauses for just a few days and then goes right through the resistance line. Do you just buy again when it breaks the resistance and it becomes the new support?
Thanks again.
mingjong
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@Dr_Roboto, Great question. I guess you refer to the bearish bar on 25 Oct 17 as shown in 14:57 in the video? From a swing trader point of view. it is an exit point...As you can see from the screenshot below, there was a climatic run into overbought of the up channel followed by the bearish bar on 25 Oct 17 where the price spread is the largest we have ever seen since the uptrend in mid Sep 17 and increasing supply (note that 20, 23 Oct 2017 bars are preliminary supply), which is a change of behavior bar. After the close of the bar on 25 Oct 17, I expect stopping of the uptrend at least, a trading range or a reversal. Yet, we see that the reaction is shallow and the trading range last for a month. This is one way to exit near the high (to anticipate the climatic run followed by a change of character bar by judging the action and supply level). Else a trailing stop can stop below 24 Oct can stop you out too.
24 Nov 2017 bar is a good chance where the volatility is low and the supply is low to prompt a position to expect supply absorption pending breakout. Breakout bar itself is another entry after this re-accumulation. A backup action i.e. a test of the resistance-turned-support is another entry but it did not come.