Identifying major Price levels is a fundamental skill of every profitable trader but it’s not always easy to get them right.
Luckily, with the Levels and Zones indicator, we can skip most of the hard process.
In fact, it’s a support and resistance indicator which automatically draws in real-time the major price levels.
In the following trading setup, not only you will learn how to find support and resistance levels with the Levels and Zones, but you will also learn how to identify price action key levels on a TradingView chart.
Understanding this is essential if you want to be a full-time forex trader who can consistently win and be profitable over the long-term.
Trade setup – 2 Feb 2018
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:
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- 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)
- The RSI Exhaustion is bullish exhausted
- We have a confirmed top (displayed by the Bottoms Tops Signal)
Unfortunately, condition 1 (divergence between the price and the RSI Exhaustion) is not satisfied.
However, all the other conditions are perfect, and moreover, the price is currently just below a major price level (resistance) 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 a recently-formed price action key level there.
Of course, it’s a bit risky because the price might stop its downward movement at the support level, 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
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
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
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 are in 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 a bit lower at the price action key level that we identified.
And, even if a technically valid buy setup has formed, it is very weak and since we’re at breakeven we maintain the trade open and see what happens next.
Trade closed – 6 Feb 2018
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.
Now we’d like to hear from you!
Can you systematically identify major price levels and can you profitably trade them?
Let us know by leaving a comment on the YouTube video above.
