Traditional peak-bottom previous

Perhaps the most important support and resistance levels are the peak-bottom previous. These are the levels that you will see when looking at weekly or monthly charts. This way we can get a full picture of the market and key reversal points. Simply identify the levels where the price has reversed higher or lower and marked it with horizontal lines as shown below:

Then, to be more sure, you can draw more support & resistance lines on the daily chart, as shown in the figure below, the old levels will remain in place, but new levels appear on the weekly chart. can see:

The peak-bottom previous form a ladder pattern

Have you heard the phrase "Old support to new resistance and old resistance to new support"? This is a form of a market where higher peak-bottom, or lower peak-bottom, during an up or downtrend. Mark these levels again, and when the price breaks up or down we can wait for the trade to bounce back, also known as a trade pullback. When you encounter this phenomenon, you may know that a sure trend exists.

The peak-bottom previous for risk management

In the example below, you notice the price breaks lower, falls below support, then it stays below it, and since then this level becomes resistant. We can either sell at this level or just below it if the price stays below. This way we can know where to wait for the next trade, and if the price gets past that level our idea is completely useless, then it makes sense to place a stop loss just above that level. . In addition, we can manipulate nearby previous peak-bottom as taking profit points.

Variable support and resistance levels

Volatility is the level of movement, in other words, the moving average. Up or down moving averages indicate price action. Here's an example of a 50-period exponential moving average (ema) used to detect downtrends and entry points:

The line 21 ema can also be used in a similar way, remember that the shorter the ema is, the more often the price interacts with ema, so in a less elastic market you should use short cycle ema like 21 such as:

Trade range in support and resistance levels

Trade range in support & resistance levels can give us many opportunities to enter value orders against a price action Trader. The main idea is to first find a range (prices only bounce between two certain parallel levels), then find a price action signal between these levels.

In the example image below, we have a pretty big range since prices only fluctuate between support & resistance:

Event-based support & resistance zones

Event zones are critical levels of the market when a price action event occurs. It can be a strong reversal or an obvious price action signal, both of which lead to a strong direction in price.

On the example image, you can see an event level formed after a strong bearish reversal candle on the weekly chart (there is also a strong bearish pin bar on the daily chart there). You need to re-mark this level as it is an important level to wait to enter a sell order at the blind entry or sell signal on a 1H or 4H or daily chart.

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