Support and Resistance

Support and Resistance
Photo by Nicholas Cappello / Unsplash

How to Create Support and Resistance Levels

Support and resistance levels are one of the most important tools for any investor or trader. Plotting good levels of support and resistance will give you an accurate picture of where price is likely to stall. This can either happen when price is both rising and falling giving you good entry or exit points.

When looking at a price chart, the first thing I do is draw my support and resistance levels. These levels are taken from the weekly closes and then we can go into the smaller time frames and see how these levels are respected.

Look at the chart below which is on the daily timeframe and you can see how price gravitates towards these levels time after time.


Let’s go into the 12 hour timeframe and again you can see price respecting the weekly support and resistance levels which indicated good levels to buy and sell. Remember this is one piece of the puzzle and you would need more confluences to become more confident in taking a high probability trades.

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Let’s go even further down to the 4 hour timeframe, here you will see some games being played over and over again and its good to train your eyes to see these patterns which occur more than you think.

The weekly level seems lost in the picture below, this is a liquidity grab to stop out traders who have set stop losses just under the weekly level, you then see price make its way to the higher levels.

You can see the same happen again and this time catch out the breakout traders as price goes breaks above the highest weekly level and then reverts back down to the lower support levels

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Please note this is not to be taken as financial advice and all information is for educational purposes only.

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