Support & Resistance – PROBLEMS & RULES!

Support & Resistance – PROBLEMS & RULES!

OFFICIAL WEBSITE: IncomeMentorBox.com

Many traders out there assume that support and resistance trading is totally foolproof and will always lead to profits, which is of course not always the case. There are some support and resistance problems, issues, rules, and tips that you always need to keep in mind. Let’s go over these right now!

Income Mentor Box, Support and Resistance lessons

Price Does Not Always Bounce For Support & Resistance Lines As Expected

Perhaps one of the biggest problems, and one of the most important things that you need to keep in mind about support and resistance trading is that prices do not always react as you would expect. Sure, support and resistance can be a great indicator tool for placing Forex and other trades. However, it is not totally fool proof, and sometimes the price does not react the way we would like, or would expect in terms of the lines on your charts.

 

 

Prices Can Bounce A Couple Ticks Before The S&R Level

One thing that can happen here is that the market can bounce with a counter rotation of quite a sufficient size. The market can continue up with a reasonable bounce or it can continue moving lower, but can also continue to move back and forth by a certain number of ticks when it does. There is a lot that is possible at this point and making premature assumptions with support and resistance can quickly lead to your downfall. You should always wait for a full market rotation when you see this occurring.

A Price Can Slice Straight Through The Support and Resistance Level

If a price happens to slice through a support or resistance level, there is really no telling what it can do. For instance, if the value of an asset goes right through a resistance level, instead of bouncing back from it as we would expect, there is really no telling where the next bounce will be. You need to be able to identify the common size of the rotation.

A Price May Breach a Support and Resistance Level And Bounce In The Original Direction

The normal way of trading support and resistance, while it does often work just fine, is not always 100% accurate. A price of an asset can often slice right through an area without the level of interest being invalidated. In other words, the prices can suffer from very random movements, and this can be a problem when using this trading method. For this, you need to set your stop loss levels to account for a certain degree of price movement randomness.

Historical Or Recent Support And Resistance?

Something else that you need to keep in mind is that your trading results will differ depending on if you are using historical averages or recent averages. Often, you will see S&R levels based on history, often several months or years, that worked fine for a very long time. However, then all of a sudden, the price stopped respecting these historical S&R lines, and just starts doing its own thing.

For this reason, it is very important to always update your support and resistance lines with recent information. You need to update your S&R levels each week in order to get the most accurate readings possible. You cannot just keep using the same historical averages over and over again. If the market stops respecting historical support and resistance levels, you have a big problem, and therefore updates need to be done. At the same time, remove older support and resistance levels so you do not get confused when conducting your analysis.

Body & Wicks

When it comes down to it, most traders out there use wicks and the extremes of candlesticks in order to draw support and resistance levels. However, what you also need to keep in mind here is that candle bodies themselves represent closing times on daily, weekly, and a monthly basis, and using these to draw support and resistance lines can help you better understand price movements.

When you are engaging in top-down market analysis, it is a good idea to start on a higher time frame and then slowly work your way down to the narrower time frames. When you are on the higher time frames, draw your levels using the bodies of the candles which indicate major swing points. Once you start moving down to lower time frames, you can adjust and fine tune your levels, which allows you to explain price action in the past with highly optimised levels. Always remain consistent in this approach.

One Or Multiple Touches For Support & Resistance?

Something else that you have to keep in mind when support and resistance trading is how many touches to your levels indicate price strength. More often than not, when trading with this method, traders will assume that the more touches a price has on a certain level, the stronger it is. However, this is not always the case and by all means, it can be a very false assumption to make. This is known as conventional wisdom, which can often be wrong when making generalized assumptions.

When trading support and resistance, all you really usually need is one previous swing low or high. When you have meaningful swing highs or lows, they will often turn into future support and resistance levels. Yet, when a price comes back to the same level a third time, it usually doesn’t hold too well anymore and it can become difficult to gauge price action. It goes against common sense, but a rule of thumb here is that the more obvious something seems on your chart, the harder it actually is to profit from it.

Support & Resistance – Final Thoughts

As you can see, S&R trading is not quite as straightforward as you might have thought at first. However, if you keep these rules, problems, and tips in mind, it should help make your life quite a bit easier. Of course, here at the Income Mentor Box Day Trading Academy, we have many support and resistance trading lessons so you can perfect this method. Join our academy today if you want to learn to trade using support and resistance the right way.

Income Mentor Box support and resistance Trading Lessons

Using The ATR Indicator For WINS!

Using The ATR Indicator For WINS!

OFFICIAL WEBSITE: IncomeMentorBox.com

If you are tired of losing trades and you need to find a great way to trade Forex and set your stop loss levels, this ATR indicator strategy is one you need to take a look at. Below, we are going to outline how to use the ATR indicator to set your stop loss levels. We also have a live profit session to show you. This is where Andrew, from our own Income Mentor Box Day Trading Academy, shows you his live trades and profits, all thanks to this ATR indicator.

Income Mentor Box ATR Indicator

What Is The ATR Indicator?

Ok, so before we really get into the meat and potatoes of today’s ATR indicator article, it is probably wise if you know what this ATR indicator actually is and how it functions. Ok, so ATR stands for Average True Range. The Average True Range or ATR indicator is a measure of volatility. If you do not know, volatility is a measure of the strength of the price action. In other words, it measures how volatile an asset such as a currency pairing is, in terms of how far the price may move in either direction in any given time.

The ATR indicator is indeed quite important and is often overlooked when it comes to analyzing and determining market direction and asset volatility. Although it is often overlooked, real trading professional know just how important it really is, and it has been in use for several decades now to determine volatility and price action. The ATR indicator can be used in order to create a full trading strategy, or it can also be used to just set entry and exit signals and levels too.

 

How To Use The ATR Indicator To Set Stop Loss

Ok, so now that we have figured out what exactly this ATR indicator is, we want to talk about how you can use it in order to win trades. In this case, we want to talk specifically about stop loss levels and how to use the ATR indicator in order to determine the stop loss level for any given trading position which you may place. Right now we are going to go through a step by step process on doing this in as easy a way as possible. Let’s get right to it and teach you how to use the ATR indicator in order to place winning trades and to set the proper stop loss levels.

  1. First things first, go to your trading platform of choice. Here you need to find the indicators tab. Look for the ATR indicator, find it, and select it. Every charting solution and trading platform should come with this.
  1. As you can see, it just looks like one single line, which you can modify as you choose. Many traders use the ATR indicator by setting the level to 20. However, by default, the level is usually set to 14, which is actually based on days. You can choose the color and the style of line based on your preferences.
  1. So, when you are making a trade, look at your charts and analyze the price of the asset in question, and examine the ATR indicator at the same time. You are looking for the ATR value, and you are looking for an ideal resistance level too.
  1. Now you need to find your stop loss by examining what the ATR indicator is telling you. You want to take the value of the ATR indicator and multiply it by 2. This is what your stop loss level will be for a certain asset at a certain time. You want to add this value (ATR x 2) to the market price, and this is what your stop loss will be.

ATR Indicator

 

Yes, we here at the Income Mentor Box Day Trading Academy know that this whole ATR indicator concept is a bit difficult to understand, especially in words without any visual reference. But hey, this is why our leader, Andrew, has taken it upon himself to make an ATR indicator trading video. If you take a look at the video, Andrew outlines all of these steps in details and provides you with several live examples. Once you see it live in action, you should be able to grasp the concept quite quickly.

ATR Indicator Live Trading Results

Of course, you don’t want to just take our word that this ATR indicator and stop loss strategy works. Here at the Income Mentor Box Day Trading Academy, Andrew always provides you with live trading updates and results, with trades being placed, going on, and being closed in real time.

We are here to show you that our strategies actually work, and that you can do the same to make good money through trading. Like we always say here, the proof is in the profits. If you take a look at the below video, you will set that Andrew placed a very good trade using the ATR indicator method which we outlined above.

The results which Andrew were able to achieve were pretty good no doubt. Using this same trading strategy which we outlined above, Andrew was able to make a profit of well over 300 Euros with one single USD/JYP trade. Guys, if you use this ATR indicator strategy, there is no reason why you cannot make a few hundred Euros profit in a single trade just like this. Also, keep in mind that this trade was only open for roughly 2 hours. Making over 300 Euros in just 2 hours is definitely impressive!

ATR Indicator Profits

Income Mentor Box & The ATR Indicator – Final Thoughts

While this strategy might be a bit complex to understand at first, we do think that Andrew did a great job at explaining it in an easy to grasp way. Yeah, it might take a couple rounds of practice, but there is no reason why you should not be able to achieve the same results as Andrew here.

If you want to become a professional day trader and learn how to profit through Forex, indices, stock, and commodities trading, our Income Mentor Box Day Trading Academy is undoubtedly the best place to be. For the low onetime payment of $299, you will gain full access to all course materials. It’s time to quit your day job and become a professional day trader from home, a highly profitable one!

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