Trading Patterns: Support and resistance in the market Video
In this video you will learn a key to trading patterns in the market. Today we focus on trading support and resistance, higher highs and higher lows, in the market.
With this information, you will be easily able to identify key areas of support and resistance in the market, and place stops and entries.
Why Trading Patterns around the Highs and Lows?
We use the pattern of higher highs and higher lows because it is well respected. This is one of the key ideas behind patterns in the market. These are patterns that stretch past any language barrier, and have been time tested by traders around the world. When we get bounces off of key levels of resistance and support, other traders see these exact same levels. When we have thousands of traders respecting these levels, we can base our trades off of them.
This theory of pattern recognition validation only due to it’s frequency is common among all patterns. These patterns have been identified, and are tracked globally, further validating these trading patterns. This is true for bull flags, flat top break outs, head and shoulder patterns, and many more.
See what happens when these Trading Patterns are Broken:
In another video here, I went over when these key levels are broken. You can see a flush of people come into the market, and push the level to a new low. This is one of the key reasons we need to have these levels marked on our charts. When a level is broken, even if the volume was light beforehand, there can be a rush of buying/selling in the market. This is due to the respect that that trading pattern has in the market. When traders see these key levels broken, they jump on seeing weakness/strength.