One of the most important aspects in trading overall is identifying important structure. It is a major driving force of the market and a major mover of price in general so is a great place to begin when looking at any type of Price Action in the market or where also to assess risk to reward ( another big topic ).
The below video tutorial goes over how I Identify these important areas and zones on the chart. To simplify the logic, one of the main aspects I use in my trading process is that I look for buy signal evidence at support and look for sell signal evidence ( price action ) at resistance. Of course, there are other elements at these areas to be aware of as well such as where price is in relation to that markets trend, which support is more valid than others or which resistance is more important.
A great aspect about structure is that it can also be used in many ways, some examples of this include that it can be used as a good guide to help a trader know where to can consider taking profits ( whether partial or full ) and also to know where one can place future orders or manage risk with stop losses.
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“These zones can be seen similar to a beer belly or a trampoline, price likes to push against these areas, but tends to bounce back.. “
In the video below I show the process of identifying these important areas on the daily chart, however these areas can also be identified on any time frame. The higher time frames however being the more preferred time frames for identifying zoning in the market ( support and resistance ) as the higher time frame zoning is much higher probability than lower time frame zoning.
Above – Video covering the basics of Support and Resistance and how to identify on the chart.
For more information on how I Identify these important levels of zoning ( high probability structure ) in the market as not all structure points are as strong as others, then I would also recommend checking out The Engulfing Trader. This training series goes over in detail how to identify important levels of zoning and also areas that I use as well on a regular basis.
If you have any questions feel free to ask below.