Support and Resistance (S/R) Flashcards
as a Trader, you must learn to spot the S/R targets.
as a Trader, you must learn to spot the S/R targets.
Can S/R be precise?
Yes
The market Races up to test resistance; the BULL BO bar was the catalyst to this trend. Several confluence levels showing strong resistance (2 MM up and a Bull Channel that has a 75% chance of a Bear BO; all in harmony at the resistance point)
The market Races up to test resistance; the BULL BO bar was the catalyst to this trend. Several confluence levels showing strong resistance (2 MM up and a Bull Channel that has a 75% chance of a Bear BO; all in harmony at the resistance point)
S/R is the most important force behind Market Movement?
TRUE or FALSE
TRUE all markets are controlled by the test of S/R, not news. It is the single most important thing for traders to learn
What is S/R constantly doing?
S/R is constantly pulling the market towards them(like magnets). The more than probes around S/R to see if more buyers or sellers are there; will one side give up? will the market BO to a new level or reverse?
Why bother finding S/R in a TR?
Because markets have Inertia and 80% of Reversal attempts in a strong Trend & 80% of BOs attempts will Fail in a TR. BO attempts will fail at S/R; BLSHS
Do all trend reversals take place at S/R?
TRUE or FALSE
TRUE
Why should a Trader spend time looking for S/R when the market is in a trend?
Because the markets have inertia and will continue doing what it has been doing. And 80% or Reversal Attempts fail
Why do traders also call Support and Resistance
Inflection Points?
Because when they get to an S/R zone it can either Breakthrough it (BO) or Reverse
S/R, Which is most helpful
S/R, Which is most helpful
Why do traders draw several lines?
Traders draw and redraw several lines as a trend progresses to find the “best fit” line for the current trend or market conditions, find some line the market seems to be respecting
Will Bears sell reversals down from a Bear Resistance TL?
Yes, it is better if the signal bar is good
Did price undershoot or overshoot this Bull TL at the green highlighted box?
It Undershoot the Bull TL
Should the trader always be looking to draw more lines?
Yes, always be looking to see if I can draw more S/R Lines, Channel Lines, etc
Even though Wedges rarely look good, Can wedge lines still be S/R lines?
Yes they can, enter on reversals from lines only if the context is good
Is the market always paying attention to Prior Highs / Lows? If so what is the result?
Yes it is, the result is you get a lot of DTs and DBs
Traders are looking for BO Tests all the time, Why?
Prior High or Prior Low often tested after BO (BO PBs)
Monthly S/R, near the end of a month, does the market like to pay attention to the S/R on the monthly?
In the final minutes of the month, traders will pay attention to ALL S/R levels on the monthly chart.
When trading on the final day of the month, does looking at the monthly chart to see if there is any nearby S/R help the trader?
Yes, it does because if there is nearby S/R on the monthly it will affect the Price Action on the 5-minute chart. With this insight, it will give me some clarity into the Trading decisions I make.
Are TRs often S/R?
Yes they’re
When in a Bear Trend what will the Bear Traders do at the MA?
They will sell at Resistance (MA)
In the eMini (ES) what are the round numbers?
Even numbers every 10 Points - example: 2900, 2910, 2920 …
Are round numbers often S/R?
Yes they’re, traders often put stops and profits targets AT or AROUND round Numbers
Should traders pay keen attention to Round Numbers?
Yes, Absolutely. Round numbers provide a strong S/R magnet for price. This helps with entries and exits in the market.
Can the MA act as a support in a Bull Trend?
Yes, it can a lot of traders use the MA and round numbers for entries and exits in the market
Different types of S/R
Different types of S/R
In a strong Bull “Buy the close Bulls” Trend why are the Bulls buying the close of bars?
They are buying closes betting that higher prices are to come, even if there is a PB first
Is 1st reversal down in a strong Bull Trend Major or Minor?
Probably and most of the time it is MINOR; the market then is either in a TR or Bull Flag, not Bear trend.
What is the best way to reduce risk when in profit?
It is to Take some profits off
In a strong Bear “Sell the Close” Trend why are the Bears selling the close of bars?
They are selling closes betting that lower prices are to come, even if there is a PB first
Note: When scalping I must make sure I am selling at least 1-2 times the size of a minimum scalp. Therefore if I was to begin trading this like a TR (BLSHS) the Bear Scalp entry would have to be 10-13 ticks away from the bottom of this new TR
Note: When scalping I must make sure I am selling at least 1-2 times the size of a minimum scalp. Therefore if I was to begin trading this like a TR (BLSHS) the Bear Scalp entry would have to be 10-13 ticks away from the bottom of this new TR
Will Bulls Buy a test of the signal bar support for a move up?
Yes, Bulls will Buy the strong reversal up near or at the signal/entry bar, if the context is good
After shorting can the market rally back to the entry price and if so what options does a trader have?
After shorting, the market often rallies back to the entry price and Bears will sell again betting on the downside move.
After buying can the market rally back to the entry price and if so what options does the trader have?
After buying, the market often rallies back to the entry price and Bulls will buy again betting on the upside move.
The highest close of a Bull Trend (Resistance), explains how the Bears trapped the Bulls and why the Bears & Bulls sold at the same price in the market here?
The Bears trapped the Bulls that bought the highest close Bull Bar that was abruptly followed by 4 Bear Bars (that disappointed the Bulls). The Bulls are now looking to get out Breakeven and the Bears know this; so the PB near the Bulls entry they sell out of their longs and the Bears sell Short knowing the Bulls want to get out breakeven. The market then continues to the downside
With a test of support, what are the Bulls locating to do?
Buy the Reversal up
Q: What does a Bull Trend need?
a Bull Trend needs HLs; a PB should not fall below magnets (support). A strong Bull Trend should not be falling below MajorHigher Lows, if that is the premise than maybe the market is in a TR
What does a Bear Trend need?
a Bear Trend needs LHs, a PB should not rally above magnets (Resistance/Major LHs).
Is a 50% PB one of the most reliable forms of S/R?
Yes it is the single most important retracement level
When do I know the Bull Trend continues?
When the market continues to form Major HLs; the Bulls by the PBs to prevent LLs
Should traders buy 50% PBs with a limit or stop orders?
Bulls will buy selloff with limit orders, or they will Buy reversals up above bars with stop orders (note: very often the market tests below 50% PB so limit orders at 50% mark often get filled)
Is a 50% PB in a Bear Trend Support or Resistance?
a 50% PB in a Bear Trend is Resistance
Is a 50% PB in a Bull Trend Support or Resistance?
a 50% PB in a Bull Trend is Support
How does a Bear Trend continue to be a Bear Trend?
Only if it continues to create Major LHs
How can I confirm a Major LH?
After the LH the market continues to Selloff to a new low; this then makes that LH a Major LH.
How do Bears create signs of strength?
They do this by keeping PBs from going above Resistance
Is the top of a Sell Climax Bar late in a Bear trend a magnet (resistance)?
Yes, the top of the Sell Climax Bar late in a Bear trend is a a magnet (resistance), the gap often close just slightly above the magnet
When do I know the premise of Bear Trend has ended?
Once a Rally goes above the top of a Bear Leg or Sell Climax Major LH the Bear trend sentiment is no longer valid; the market is now either in a TR or Bull Trend
