Secrets To Buying At Support (THIS IS WHAT YOU MUST KNOW...)

[Music] what is up traders stephen here your honest trading coach and today we'll be talking about the top three ways you can buy support here's the truth all support levels are not created equally what i mean by that is there are some that have a high likelihood of providing a bounce out of the market and those are the levels you should be looking at to buy but one of the biggest mistakes i see a lot of traders making is trying to buy every support level and also not knowing exactly how they're going to buy once the market gets into that support level and that's why in today's video i'm going to share with you how to find the most important and most probable areas in the market that are likely to provide a bounce out of support and the top three ways to buy those support levels so that sounds interesting to you make sure you go ahead and click that like button and subscribe we come out with content like this each and every week that buttons down below the video to the right hand side click the notification bell so you don't miss any of our future content and we are going to dive right in for today's video let's get started okay so for the first part of this video what i'm going to be teaching you is exactly what you need to know in order to buy support levels how do you find the ones that matter because as i said all support levels are not created equally there are some that are very likely to provide support and some that are not so let's talk about the difference how do you find a level in the market that is likely to provide support the first way of finding high likelihood levels of support that are likely to provide a bounce that we're going to look at is counter trend support levels now a lot of people make this mistake and why don't you do this and tell me you don't have to tell me talk to yourself for a second yeah be crazy like i am right now by the way i'm in a room by myself just talking to a camera so don't feel bad when you do this tell yourself where do you think the major level of support is on this market would you call it right here and don't worry if you did because a lot of people make this mistake this is not a major level of structure let me tell you why this is not a major support level that is likely to provide a bounce the reason is because we are in a downtrend since we're in a downtrend breaking into new lows the market is likely to do what continue in that downtrend so therefore why would we want to buy out of a level like this if the market's likely to continue down the answer is we would not the way we find a major level of counter trend support is by putting a horizontal line on the lowest low that we can see on the chart if we look at this trend the lowest low in this trend the lowest most recent swing low is right here with that being the case we put a horizontal line on that low and we scroll the chart back until when you might ask until we find the last level the market used as support which is right here now this is not the only step when trying to find important levels you want to look at the most recent level this is the most recent level the market used as support you also want to make sure this level's been tested multiple times so the way we do that is by placing a little zone here on our level and then looking left asking ourselves was this level used multiple times as support the answer of course in this case is yes we have a level that's been tested once twice thrice for count them up a lot of times right we have a level in the market that has been used multiple times as support so this is our first way of finding major structure support levels that we're going to look for trading opportunities out of is by looking for the counter trend levels by looking after the most previous swing low which is here and looking down and left from that level now with this being the case what we will be waiting on is the market to push down continue in this downtrend before hitting our counter trend level of support that's the first way we're going to find support levels that are likely to give the market a bounce let's talk about way number two which is a trend continuation way of finding a support level let's take a look at the pound yin on the pound yen we're going to drive out to the four hour chart and here what type of trend is this market in it's pretty obvious we're in an uptrend and the reason is because we're breaking into new highs once we do this and we break into new highs one of the most probable levels of support is the last level that was broken as resistance and if this is review for some of you don't worry we're getting some more advanced stuff in a second and if you're new this is some pretty cool stuff to learn because it can provide some really probable bounces as support out of the market so in this case what we're looking for is the market to break out of the most previous level of resistance once that happens we use this level of resistance now as support so what we would be looking for in this case is the market to pull back into our previous zone of resistance that is now likely to provide a bounce out of this market as support that's the second way of finding major support levels and the third way is what i call the deep retracement level and that is the most recent level of support before the break into new highs let me do that one more time the most recent and let me delete these as well actually the most recent level of support before the break into new highs if we are in an uptrend the market will consistently be making higher lows here's our low higher low and higher highs what i'm saying is that the previous resistance level is the first place in a trend continuation setup that we will look for possible long trades if it fails to make a run up fails to make a bounce big enough to hit our targets fails to push the market higher from our previous level of resistance our second area is the higher low so in the case on this chart what we have is a low higher low a high and our higher high right and that being the case this higher low is going to be the next major area of structure support that's likely to push the market higher so if this market pushes right past our previous resistance level then the next time we're looking for our support buys is going to be at this next level of structure that was the previous higher low in an uptrend so the three levels are in terms of train continuation the level we're looking at is the previous level of structure resistance broken or the first high and before the higher high and that level is a place we'll look the market to make a bounce and then if that level does not hold the second level is the previous higher low these are the three ways we can find the most probable support levels that the market has to offer now what are the three ways that we are going to be entering trades because just understanding highly likely levels of structure to provide a bounce is not anywhere near enough in terms of trading we have to have an entry now what i'm going to do is share with you the top three ways to buy support okay so let's take this for example and let's say we are looking at the pound yen and we have this area of structure support right here why is the support because it's the most recent level of resistance that was broken as we have the most recent level of resistance broken we're waiting on the market to pull back into that level what's the first way that we can buy support this is support previous resistance is our support what's the first way we can actually buy we need an entry reason right well the most aggressive way you can do this is with candlestick patterns okay so on this four hour chart if the pound yen was to come into the area of re support that we have pointed out we could look for a candlestick pattern now there are only two that i would recommend using there are only two that i even personally use in my own personal trading those are engulfing patterns and hammer patterns they're going to be an engulfing candlestick pattern and a hammer candlestick pattern i'm going to go over those really quickly with you so here is a really good example of a hammer candle for one and an example of a successful long trade using the resistance turn to support strategy looking at the chart now what do we have we have a low to a high then what a lower low to a higher high if this is the case what are we looking at as the level of support that's likely to provide a bounce we're looking at the high right here this is the level that is likely to provide a bounce out of this market now as we're looking here the first way is by using a candlestick pattern right the first way we can buy support is by using a candlestick pattern so let's see what the market does we push into this level we get some chop in this level oh a doji that's a good sign doji at a previous support level shows the market is slowing down as it's pulling back as you can see here we pull back with a big red candle we got smaller candles smaller body smaller body small body giving us an indication that we could see this as our potential by level now what are we actually waiting on remember a candlestick pattern whether that be an engulfing pattern or a hammer candle now a very easy way to have an objective rule for a hammer candle is by bringing out your fib retracement let me delete all of this actually we can no let's look at this too you know we're in our area of support right so we'll delete that bring out your fib retracement go from the low of the candle up to the high of the candle now click the settings of your fib retracement and put on a 33.3 percent if the candle closes in the top 33.3 percent that means it closed in the top third of that candle i count that as a hammer candle whether the candle body is red or green is irrelevant this is what i count as a hammer candle so in this case what we would have is a market coming into the previous level of structure resistance which we know is a likely area that will provide support and a bounce out of this market with this being the case after getting a candlestick pattern like an engulfing pattern or like the hammer candle we have here the way we would buy this is by placing an entry at the close of that hammer candle or the open of the next one and doing your stops and targets accordingly as a suggestion or what i like to do is make sure my stops are at least under that hammer candle targets back at previous resistance and we see how the market played out pushing higher now another example let's say you didn't trade hammer candles but instead you traded engulfing candles well a very good example of an engulfing candle is right here the very next candle after our hammer an engulfing candle for me rules based because our our trading needs to be objective the reason i use a fibonacci retracement to point out my hammer candles is because i want objective rolls for that pattern i don't want to be looking at random candles like this and going that might be a hammer but i'm not sure and being confused about when i'm actually supposed to place a trade you may have felt this before in your own trading and that sucks to be confused about whether or not you should actually enter if you create rules for your entry pattern you're no longer confused about when to enter the trade that's why i use very simply a fibonacci from low to high if the candle closes and whole body is it in the top 33.3 of that candle i'm solid to use that as a hammer as for an engulfing candle all i need is the body of the green candle to be bigger than the previous red candle that counts as an engulfing pattern so that's the first way of buying support that i've found to be extremely accurate for my own trading now don't don't forget this remember this is only potentially profitable this is only going to give you an edge this will only possibly make you money if you do it correctly if we're at a major level of support as we have diagnosed earlier as we have displayed earlier as i taught you earlier i don't know what i was trying to go for there but as i talked about earlier being at either previous resistance that can turn support or that higher low that can turn to support or your counter trend way of finding support when we're in those kind of areas trading candlestick patterns like these has proven to be profitable for me and that is not to say that you need to go out here and start trading this right now because you shouldn't that is a path to failure what i'm telling you is it's proven to be profitable for me but you need to go test it yourself we're going to talk more about that after the next two the second way you can buy support is by waiting on an actual chart pattern i'm talking double bottoms i'm talking head and shoulders those are the only two that i actually use so let's take a look at a couple of examples of those to get you versed in the second way you can buy support so here we are on the canada yen 15 minute chart i'm gonna go ahead and hit the plus button here and show you what i'm talking about in terms of using price patterns or chart patterns in order to enter these types of support bounces so here we have a market pushing up would this be go ahead and answer this for me would this be a major level of support it would not why because the market just made lower lows putting us into a possible bearish trend we don't want to look at this as the previous level of support or as a level of support at all so what do we do remember our way of noticing this we put a horizontal line on the chart we go down to our next major level which would be here and of course right in here as well the reason being these both are levels that were tested multiple times and i know it looks like a lot of lines on the chart take this one off and it's just two green zones we'll draw them in like so we have a level here tested multiple times we have a level here tested multiple times for this type of trading all we are doing is waiting on the market to get into one of these levels as you can see we got into our first level here the market didn't do anything we didn't get a candlestick pattern we didn't get a price action pattern nothing we blew right past the level that will happen a lot and that's totally fine so what we're going to do is just erase this level and we're waiting on the market to hit the next level now we have now that we've hit that next level let's see what we get the market's pushing up oh now we've pushed below this level since we've pushed below this level what's the next level if we look left we're in a downtrend right this is the counter trend way of finding support levels that are likely to provide a bounce we look left as we look left what do you see we have this area right here that was tested multiple times this big green zone that is the next level of structure support the market will hit if it continues lower and or our counter trend support level so now all we're doing is waiting on the market to get into this level once it does what we're waiting on is something like this the market's now touched our level and created what type of price pattern what type of chart pattern is this this is a double bottom we have one bottom our neckline now we have a double bottom and the market's pushing higher so as with everything in our trading the same way we did with a hammer candle and engulfing candle we have to have rules for our entry patterns we have to have rules for this double bottom and my rules for a double bottom are extremely easy and simple like most of the things i do in trading trading's not as complicated as most people would have you believe it's actually pretty simple as long as you have the correct amount of rules so for my rules for a double bottom i'll do this in a different colored line to make it super easy is as soon as i get the first bottom of my double bottom actually let me make this super simple as soon as i have my first bottom let's call this my first bottom of the double bottom as soon as i get that i place a horizontal line at the low of that double bottom and let's make that straighter and i place a horizontal line at the bodies of that low the lowest bodies and the lowest low of the first bottom what i'm looking for is a candle that at least touches the first line the top line with a wick it can be a wick it can close in here with a body that is irrelevant a wick can go past my second line that doesn't matter either this is just my termination zone all i need to see is that a wick touches it and the rule that i have is a body of a candle cannot close below it the body of a candle closes below this low i'm expecting trend continuation a close below means that we're likely to head down in this case and that's not something i want to buy if that happens so the rule i have is i'm waiting for a candle to terminate within my purple zone there we have a wick that's touched my purple zone i'm already good this is a double bottom now another rule i use is i do not trade just double bottoms i trade double bottoms with confirmation what is confirmation for me super simple it's a green candle if i see any type of buying pressure after this double bottom then i'm in i'm good to go for a possible trade there we have nothing closing below my zone right if that candle would have closed down here like so this would have been a no-go for me i would have not attempted to place a trade here let's see if we can get a green candle for entry there we go so in order to use a price action pattern like a double bottom what i'd be waiting on is the market to get into my zone my area of important structure support that's likely to provide a bounce and then give me my rules based double bottom i would have a stop loss under that rules base double bottom target set appropriately previous structure something like that hit play and in this particular case you can see that eventually the market did hit those targets so that's how to use a double bottom and the second way of buying support levels is to wait for candlestick patterns like this and like the head and shoulders pattern i'm not gonna go over that pattern i have a full video on the head and shoulders pattern i'll put in the top right hand corner of the screen it's gonna be the same exact process of finding important levels of structure support and then looking for the same exact pattern that you're gonna learn in that video in the top right so if you're interested in that check it out otherwise we're gonna move on to the third and final way of buying support this way is by far my favorite before we get into that though let's head over back to camera so before we get into that it is so important for you to realize that you can understand this strategy like the back of your hand you can have a grasp on technical analysis that is unmatched and unrivaled by any trader in the world and you could still come up a failing trader why right why and how is that even the case well the reason is because understanding technical analysis and understanding a strategy is not the most important part of trading it is a necessary part you need it you have to have a strategy that makes money otherwise you're doomed to fail right but finding a strategy that makes money and mastering it takes less than a month you can learn technical analysis in two weeks there's not that much to learn you can learn the ins and outs of a candlestick chart in two weeks you can learn an entire strategy in less than two weeks what's important in trading is understanding how to be disciplined that strategy through drawdowns understanding how to have a good enough risk management plan where you don't blow your account or end up quitting trading because you're losing too much on each trade so in terms of discipline what you need to do instead of taking this going out here and just trading it the next 10 times you see it on a chart which i know half of you will more than likely do and that is a damn shame because that has a path to failure instead what you should be doing is taking this information going out into historic data or demo trading and you need to do the historic data testing you need to back test go through historic data find a hundred instances where this happened on a specific currency pair and on a specific time frame for instance canada yen 15-minute chart find examples of this that have happened when all of these rules line up find a hundred instances and see if it was profitable see if it does provide an edge over the market for me it has but don't just take my word for it go test it for yourself and once you see that it actually has provided an edge of the market it has made money in the past that is going to give you so much confidence and give you the discipline that you're going to need in order to survive the inevitable drawdowns that every trading strategy comes with the reason you're having a problem right now being consistently profitable is not because you don't have enough strategies at your disposal it's not because you haven't found the best strategy in the world which by the way does not exist it's because all the information is out there you have all the strategies you need i have profitable strategies on my channel the problem is you're not staying disciplined to them you haven't done the testing likely that you haven't maybe you have maybe you're one of the few traders who has done the testing but you're still either not staying disciplined to that strategy or you backtested it wrong or you're risking way too much risk management is one of the most important parts of trading strategies are about a third of the battle in terms of becoming a profitable trader i'm about to get back into the third way of buying support don't worry don't get bored yet this is some of the most important information i can tell you about trading strategies themselves what you're learning in this video technical analysis itself about a third of what creates a profitable trader the other two parts are discipline and risk management and risk management doesn't mean you go out here and risk five percent per trade doesn't mean two percent per trade doesn't mean a standard lot a mini lot it means you have to come up with a number that when you lose you will be comfortable with if you had five ten losing trades in a row right now that happens with strategies ten losing trades in a row not often but it does happen for me at least but five losing trades in a row very very common thing for me for most professional traders what you need to do is come up with a risk management plan where if you lose five in a row you're not going super emotional uh laying in the floor in a ball crying like a baby you don't want to be that guy trust me i've been there and it was very embarrassing when my girlfriend walked in and saw that don't be that guy instead pick a number you'd be comfortable with if you lost five trades in a row if you lost 10 trades in a row is that a hundred dollars a trade is it ten dollars a trade is it a thousand i don't know what your capital is in your account or what you're comfortable with that's a number you have to decide has nothing to do with anyone else once you have that number and you've tested the strategy to see that it's been profitable you've watched it go through drawdown in past and historic data and come out the other side profitable that will give you what you need in terms of discipline and if your risk management plan plan's on point you can keep from blowing your account and you can stay disciplined continue to go up with your account instead of down into the dumpster that is the most the two more important parts of trading then the strategy is definitely gonna be risk management and discipline so never leave those two out and don't forget that at all and do not go trade this just on random pairs because i said that it works for me go test it yourself as i say that let's go ahead and take a look at the third way of buying support for the third and final way of buying support i'm actually going to show you a live trade that i'm in right now using exactly what i'm teaching you and this trade is based on multiple time frames so the third way i personally buy support and the third best way actually is the first best way i saved the best for last the best way i've ever found to buy support levels is to use multiple time frames and trade price patterns chart patterns like that double bottom on lower time frames so on a four hour chart what we can see is what we have a break of a high and we have a pullback into what into that high so are we at a major level of structure support on our four-hour chart we are yes okay so now that i have that pointed out the way i go about this is dropping down two time frames i drop down one time frame see that i have nothing here so i'm like okay i'll go down one more time frame from a four hour that would be a one hour then a 15 minute chart so for me i went four hour major support four hour find the levels in the same exact way you learned at the beginning of the video after you find the levels on a four hour or whatever time frame you pick go down two different time frames to try to find those chart patterns that you learned just a second ago this is one of my favorite ways to find very high likelihood trading opportunities buying support levels so in this case what we have is the market pushing down lower lower lower this was a possible double bottom but what happened we closed below so therefore i don't use it as a double bottom but if we take a look at my rules for a double bottom what are they let's put replay mode on let's go ahead and go right here if we have that first bottom what am i doing horizontal line where does it go at the body of the swing low the bodies of those candles and at the low of the first bottom inside of this is what i call my kill zone this is what i call the area that we can terminate so at any point that we at least touch this zone i'm in but we cannot close below this zone or i do not look for a trading opportunity so we have now entered the zone we have a valid double bottom what am i waiting on confirmation i want to see a green candle to show me some type of buying pressure still in the zone we haven't closed below and there's our green candle i actually didn't get involved it was an accident didn't get involved until a little bit later on got kind of slipped on the spread this is why i don't trade low time frames that much but that's a completely different video in this case got filled there the market has since pushed around a little bit we're barely in profit considering how far away our target is but if this plays out before i get done editing this video i will show you guys this trade so i am still awake here at about 54 a.m trying to get this video edited so i can get it out to you guys by tomorrow please give me a thumbs up for that one that's the like button right below the video let's check out how this trade played out here on the dollar swiss we were just talking about unfortunately market stopped me out by 0.7 pips before heading higher leave a comment if that has happened to you before this is the way the market behaves sometimes fortunately fortunately not unfortunately my zone was correct this zone did provide a bounce but unfortunately my stop-loss was a little bit too tight and when i say a little i mean barely too tight because uh if it would not have got stopped out obviously i would have been up here and hit targets but i did get a couple of other trades using this exact strategy and it's going to give me an opportunity to explain it a little more detailed for you so that you can completely grasp this strategy and how to use it on your own the first pair we're going to take a look at that i had another trade just like this own is the aussie new zealand okay so here on the austin new zealand first off tell me what type of level this is so we have the market pushing down right we have a new high we just pushed up this is our higher low our higher high the market has just pushed up this is our deep retracement level when i say deep retracement level it's the previous higher low or the previous swing low before the break into new higher highs in this uptrend so for that reason this is where my important zone goes right that's what we've learned so far in this video and then what well then i wait for the market to get in that zone after we get in that zone i'm dropping down to the 15 minute time frame first to see if i have any kind of trading opportunity i do not so at this point i'm dropping down to the five minute chart and would you not know it here we have a nice double bottom so what is our rules for our double bottom we need our first bottom here that is our first bottom coming down then we can use horizontal lines here we're looking at the lowest lows of that first bottom we're also looking at the lowest low of that first bottom we need a candle to at least touch our first purple line here and that cannot close below our second line because that would be trend continuation to the downside so is this meeting all of our rules so far yes it is after that what do we need confirmation with a green candle so this is exactly how i would be trading the multiple time frame way of buying support and this trade is one that ended up working out i actually didn't get a chance to record the entry but there we have a winning trade here on the aussie new zealand next up we're gonna look at the new zealand dollar so here's the other trade i had using this same exact method now this is in the opposite direction but the same exact rules apply just opposite so if the market's pushing higher what i'm looking for in my counter trend level is the latest level of resistance so in this case i'm on the one hour chart and we'll actually use market replay to make this super easy i'm on the one hour chart the market has just broken into what here's our previous high low higher highs we're breaking into higher highs since we're doing that what am i going to do i'm going to put a horizontal line on the highest point price has gotten i'm gonna look up and to the left and find the next level of resistance then i'm gonna ask myself has this level of resistance been hit multiple times yes it has with that being the case this is going to be an area i look for short trades i know this is not necessarily buying support but it is selling resistance they go hand in hand at this point i wait for the market to get into my zone when we do i start dropping down to smaller time frames first off we're going 15 minute so on the 15 minute i'm gonna see if i get any type of entry as we move the market forward i'll zoom in a bit make it easier to see have we got a double top we have how do i know that for a double top is the opposite rules of the double bottom we have the bodies of our first top and the high of our first stop as a termination point if a candle closes above the second purple line here is that going to be a valid double top for me no it's not if a wick goes way above it is that a double top still yes it is so that's what we're waiting on now and there we have our confirmation so after our double top we're just waiting on a red candle for confirmation we get it here on the new zealand dollar placed the trade did not get a chance to record the entry on this one but it did end up pushing around a bit playing with our emotions and then eventually pushing down and hitting our targets about a one point six to one initially i had my targets down here at this previous level of resistance but when uh they got a little later on and i thought i was about to go to sleep i went ahead and took the position off at a 1.6 but that is a couple of other examples of using multiple time frames in order to buy support and in this case cell resistance with this strategy the third way of buying support is to use multiple time frames find your support levels in the same way on a higher time frame drop down to a lower time frame to look for potential chart patterns like the double bottom or head and shoulders pattern which is in the top right corner of the screen i do hope that you enjoyed this video if you did make sure to click like make sure to subscribe we come out with content like this each and every week if you enjoyed it and you're ready for some more advanced training then we do have some space available in the eap training program that is our vip mentor program that comes with a full training course teaching you every single strategy that i personally use teaching you how to become more disciplined as a trader teaching the the exact risk management plan that i use we also have a best setups of the week video that i do each and every week pointing out specific levels of support then and resistance that i'm looking at to trade based around we have something called the pro trader report you'll be getting each and every week that shares those levels as well along with that there are three to five email alerts each week that are not necessarily meant as signals but meant to showcase how i am using the strategies you're learning in the course and on top of all of that you also get priority email meaning you have access to me with any questions you have about forex in general about the course or if you just want to have a conversation with me you have access to that in the vip program that's linked in the description labeled e a p and if you're not interested in that no big deal just make sure you do keep it locked here by subscribing to be alerted about the free content we come out with each and every week i hope you trade green have an awesome rest of your week or weekend depending on when you're watching this and i will talk to you in the next video see you soon

Channel: The Trading Channel

Views: 257,438

Rating: 4.9721899 out of 5

Keywords: support and resistance, support&resistance, support and resistance forex, support and resistance explained, forex trading, learn to trade, day trading, how to trade forex, forex trader, stock market, price action, price action trading, best forex strategy, technical analysis, forex day trading, Currency trading, currency market trading, currency markets explained, currency market today, currency trading basics, currency trading for beginners, currency trading for dummies

Id: U_i1uKYI6Ug

Length: 33min 49sec (2029 seconds)

Published: Wed Jan 13 2021