How to Trade between Support and Resistance

How to Trade between Support and Resistance

How to Trade between Support and Resistance 300 169 Minimalist Trading – Best Trading Indicators for TradingView

Being able to trade Support and Resistance levels is one of the best ways to be consistently profitable in trading.

The best part?

There’s one support and resistance indicator for TradingView which is able to identify key trading levels in real-time.

It’s called the Levels and Zones and in today’s trading opportunity we take particular advantage from it.

In particular, the resistance level that the indicator displays is useful in safely setting our stop-loss.

On the other hand, the support will be used, instead, as our take-profit level.

If you want to learn how to trade based on support and resistance levels, you should definitely consider developing your strategy around the Levels and Zones.

The good thing?

In the following trade opportunity, you can learn and replicate our own (very profitable) support and resistance strategy.

Trade setup – 26 Mar 2018

Trade between Resistance and Support levels Setup 1

A very clear setup has formed just below a major resistance. This indicates a high probability trade and so we trade it!

In particular:

    1. The price and the RSI Exhaustion are in divergence
    2. The RSI Exhaustion is bullish exhausted
    3. A now top (displayed by the Bottoms Tops Signal) formed and it is now confirmed

We set the stop loss just above the resistance so that we are extremely safe and protected, and we set the target down at the major support.

In this case, the Levels and Zones indicator is offering us a very clear picture of where the price can move, and with the help of the other indicators, we can predict where it will most likely move.

Trade update – 27 Mar 2018

Trade between Resistance and Support levels Setup 2

In the setup above we erroneously placed the entry point at the bottom of the candle, but the candle closed higher (in our trading account it was correct!).

So, in our trading account, we entered at a much higher price and so the actual risk-reward is better, it’s 5.3 to be precise.

Now the price is moving into the stop loss area but we are enough protected by the sell zone and the major resistance.

Trade update – 27 Mar 2018

Trade between Resistance and Support levels Setup 3

The price is now slightly lower but it’s finding a hard time moving down.

However, the RSI Exhaustion is moving significantly lower and so the price should follow.

Trade update – 28 Mar 2018

Trade between Resistance and Support levels Setup 4

We are now about halfway into the target so there’s still a long way to go.

The price movement allowed us to move the stop loss to breakeven so that, from now, we are in a risk-free trade.

Trade update – 28 Mar 2018

Trade between Resistance and Support levels Setup 5

The volatility has increased and the price is almost down to our target.

By making a simple candle analysis we see a bearish setup and so we can be confident in saying that we should see a lower price.

Trade closed – 29 Mar 2018

Trade between Resistance and Support levels Setup 6

We just reached the target of this trade between resistance and support levels.

Ultimately we got a very profitable trade with a 5.3x return which was achieved by executing a very profitable strategy between two major trading levels.

Now we’d like to hear from you!

Do you take advantage of support and resistance levels for your trading or do you believe they are just meaningless psychological levels?

Let us know by leaving a comment on the YouTube video above.