Take advantage of major price levels

Take advantage of major price levels 300 169 Minimalist Trading – Best Trading Indicators for TradingView

Take advantage of major price levels

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Introduction

Today we’re looking at another trading setup using our technical indicators, which are considered to be among the best indicators for TradingView. In particular, we’re using the Bottoms Tops Signal in combination with the Levels and Zones, and the RSI Exhaustion.

This trading setup shows how we can take advantage of major price levels, like the resistance and the support identified by the Levels and Zones indicator. Understanding this, is essential if you want to be a full time forex trader because not only it allows you to define an easy forex strategy, but it allows you to trade safely as well thus, setting you in the best position for a consistently profitable forex strategy in the long-term.

Trade setup – 2 Feb 2018

Take advantage of major price levels Setup 1

We have a rather good trading setup on GBPNZD 1h. We must admit it’s not the greatest but it’s definitely a valid one and it is reinforced by the major resistance level at the top.

In fact, if we check the list of our usual conditions we can say that:

    1. The price and the RSI Exhaustion are NOT technically diverging (this is the weak sign of the setup and it’s something we don’t like)
    2. The RSI Exhaustion is bullish exhausted
    3. We have a confirmed top

Unfortunately, condition 1 (divergence between the price and the RSI Exhaustion) cannot be checked, however, all other conditions are perfect, and moreover the price is currently just below a major resistance level which played out very well in the past and so should do again now.

Because of this, we get into this trade by setting the target a bit lower than the major support at the bottom because we identify some interesting recently-formed price structure there. Of course, it’s a bit risky because the price might stop its downward movement at the support, but if that happens, we are far away from the entry price and so we will be able to play with the breakeven level.

Trade update – 2 Feb 2018

Take advantage of major price levels Setup 2

The price is moving into our stop-loss area, but it is ok. At least, we don’t see any warning sign and we are enough protected by the sell zone identified by the Levels and Zones indicator, and by the resistance level as well.

Trade update – 5 Feb 2018

Take advantage of major price levels Setup 3

After a few days, the price is making a significant move to the downside which is exactly what we want to see. Moreover, the RSI Exhaustion is dropping significantly as well and it is bearish exhausted which, considering the downward price movement, should indicate a further drop in the price.

Trade update – 5 Feb 2018

Take advantage of major price levels Setup 4

The price went down further and then retraced a little bit forming a bottom. A simple technical analysis, however, suggests that it should not be a major bottom, so we are still confident that the price should ultimately move lower.

Since we want to trade safely, we move the stop-loss to breakeven so that, from now on, we’re on a risk-free trade and in the worst case we will make money.

Trade update – 6 Feb 2018

If your target was the major support than now you would be out of the trade with a very nice profit. However, our target is still a bit lower and, even if a technically valid buy setup has formed, it’s very weak and since we’re at breakeven we maintain the trade open and see what happens next.

Trade closed – 6 Feb 2018

Take advantage of major price levels Setup 6

After barely reaching the target a few hours ago, we’re now out of the trade.

Even if our target was a little bit aggressive, with the careful chart analysis that we performed, we ultimately got what we wanted, which is closing another winning trade.