Ultimate guide to find Working Support and Resistance levels easily: Unpublished hidden guide 2023

What are Support and Resistance exactly?

Support and Resistance are areas where price has reacted to in the past and will "potentially" react again in the near future.

Why do we have to draw Support and Resistance Levels?

We draw Support and Resistance levels because once the price is back to these levels there are possible trade opportunities that arise and if you have these levels drawn already, you will have a great chance of picking trades at the correct time.

Criteria and Traits to identify Support and Resistance level

1 - The extreme levels   

• The highest and the lowest point that price has reached or reacted to in recent times. 

• These levels are very strong as they represent the range of the market for a particular time period.

• Traders who are using SNR will definitely have an eye on these levels for a potential trading setup.

2 - Series of rejection or reaction

• The more rejection the better.
• These levels work best in a ranging market as in such a market there is a constant fight between buyers and sellers and hence making these levels work again and again.
• In a trendy market if you find such consolidation then wait for the breakout and try to trade only when the breakout is in the trend direction to minimize the risk.

3 -  The level should be obvious and easy to spot  

• You should be able to spot the level within seconds of looking at a chart.

• Traders who are using SNR will definitely have an eye on these levels for a potential trading setup.

• The majority of traders wait for such levels to enter or to exit their trades. 

4 - Movement after a rejection is drastic 

• Reversed significantly in the opposite direction.

• The drastic movement shows the strength of the traders or large volumes.

5 - The level has acted as both Support and Resistance 

• It is respected by both sides.

• When buyers and sellers both are respecting a level, by itself it is a valid point to consider using the same level as it is a strong level and all the traders are respecting these levels in the current market situation.

NOTE - The more traits we have the better will be our Support and Resistance levels but it's not mandatory to complete all traits to form strong levels. 

NOTE - SNR is one of the confirmational tools and it's not the complete setup, we always wait for the price action performed first in order to take trades.

How to Practice This Strategy

The best way to get a firm grasp on any strategies is through deliberate practice.

There is no more efficient way of practicing that than in a Demo Trading Account with a real trading environment.                                

NG