The Story of Desmond Leong
Desmond is your common dealer. He began off blowing up 7 (or more, I’ve lost count) bills amounting to extra than 500k, examined over 30 Expert Advisors (EAs) to no success and spent over 10k on silly vain guides.
Today he runs an award prevailing trading crew and gives market analysis to a number of the most important brokers together with IC Markets, XM, Axi, Tickmill, FXCM, VantageFX, easyMarkets and more.
He now has a easy goal: Creating an military of traders who change profitably together and maintain each different responsible. Guiding them with the choices maximum comprehensive no-BS free tutorials in order that nobody ever wishes to undergo the choices pain he went through himself to come to be a profitable dealer.
Here is how I became from blowing up 7 debts to ultimately being a worthwhile dealer. Learn a lot of these and also you’re accurate to go (no I don’t provide coaching, sorry):
Finally, a multi-timeframe dynamic help and resistance indicator that facilitates you mechanically discover sturdy zones to shop for and promote from.
Support and Resistance Trading Strategy
A right guide to know-how the way to alternate support & resistance profitably. Crafted by using a crew of CMT, CFTe & CFA certified traders.
Trading in simple terms based totally on support and resistance may be a totally worthwhile method – but simplest if you do it effectively. I am a full-time trader walking an award winning research corporation, supplying evaluation for the most important banks and brokers within the world. My personal trading approach (on top of support and resistance) involves the use of Advanced Fibonacci Retracements, Candlestick Patterns (simply essential), True RSI and proper exchange management. Below is a short video I turned into featured in displaying the day in my lifestyles as a trader.
Before you can even begin to trade guide and resistance, you need to understand the way to interpret it and most importantly, a way to clear out the coolest zones from the choices bad zones. Notice I say zones here and no longer ranges. Because assist and resistance works in the form of zones (regions), now not particular ranges.
Today we are able to be overlaying some matters, especially, to put together you to no longer handiest use this aid and resistance indicator but also to make exact cash buying and selling it.
At the choices give up of this topic, you need to be nicely in your way to making significantly properly money the use of assist and resistance to alternate.
Here’s a easy Table of Content list so you know what we will be protecting these days (it’s plenty lol)
Do you have got a video explaining the whole thing?
Sure! Watch this video as I move into how I use guide and resistance in my buying and selling method.
In this video below, I share about how I use assist and resistance in my trading approach. This simple technique has helped me change complete-time profitably. Well, it’s easy but difficult to grasp. It calls for a combination of guide and resistance, Fibonacci retracements, Fibonacci extensions, True RSI and proper alternate management.
Support and resistance simplified
Back to fundamentals my pal.
Let us first well outline what Support and Resistance tiers are before shifting in addition (to avoid any confusion).
Resistance = any level this is above rate.
Support = any stage that is below fee.
Support and resistance tiers are basically key degrees a person ought to watch out for due to the fact preceding charge action between the choices bulls and bears have given us a key sign into the choices importance of these tiers. See price failing to break above this resistance line for the past three instances? That’s virtually a robust level to be aware of.
If you notice price failing to break beneath this horizontal aid line more than one instances, it is a robust stage to take note of too. One of the maximum commonplace questions we’re asked is the way to decide resistance and support traces – particularly which of them are the choices maximum critical when you consider that primarily based on how we draw them, almost every level may be an critical stage.
Diagonal vs Horizontal
Which is extra correct?
Quite genuinely positioned, there are numerous ways to attract support and resistance traces, but only a few correct methods to do so.
What makes the TFA Support and Resistance Indicator one of a kind?
Versus the other a hundred signs out there.
What makes this assist vs resistance indicator special from all the hundreds others out there’s that it filters out a whole lot of the susceptible stages and on top of that, it doesn’t best locate guide and resistance stages, however instead greater importantly, locate aid and resistance areas. Now, this isn’t some “call for/supply area” indicator which many humans are acquainted with, it’s manner better than that.
Using areas (in preference to lines) gives us a miles better concept on which degrees to watch out for. After years of checking out, the maximum important support and resistance levels can be broken down into these 3 :
These are tiers where charge simply reacts and bounces off more than one times. The more instances fee reacts off those degrees, the stronger they are. Here’s a picture of how swing highs appear to be :
Pullbacks arise when a swing high/low has been broken – then fee makes a “pullback” to the stage. In the photograph beneath, you may see that once our swing excessive resistance is damaged, it will become an “overlap assist”.
An overlap support/resistance can most effective arise while rate has damaged a swing high/low and made a pullback to the choices pullback assist/resistance. Only after fee has bounced off our pullback guide/resistance, then it will become an overlap guide/resistance. You can further consult with the choices image above to better understand.
Video of our assist and resistance indicator in action
Watch me as I explain a way to use this powerful tool in my personal trading.
Learn a way to pick out resistance zones with our assist and resistance indicator
Remember : Resistance is always above fee. Support is continually beneath rate.
We will now take a look at how our Support and Resistance indicator for MT4 identifies the three fundamental styles of guide/resistance as referred to above : swing excessive, pullback and overlap.
Finding swing high resistance on our MT4 Support & Resistance Indicator :
This is virtually trustworthy. We don’t simply pick any swing high, we choose the predominant swing excessive. How we define primary swing highs here is based on the choices parameter we will regulate called “Swing sensitivity“. The higher this fee, the extra good sized our swing highs are.
This image beneath is while we’ve got a swing sensitivity of one hundred. This way we simplest select swing highs in which there are greater than one hundred bars to the left and right of the most important excessive. Notice there are just a few principal lines?
If we adjusted our swing sensitivity to something like 30, this would result in lots greater weaker strains appearing. This could suggest there are many susceptible swing highs.
Combining swing highs to create sturdy regions of resistance
Now, whilst more than 1 swing high combines, it will become a strong stage of resistance. This is proven via a highlighted place on the choices chart with our MT4 indicator.
What our MT4 Support and Resistance indicator does is that it intelligently scans the complete chart for such tiers and if they’re close enough, they may be blended to shape a swing excessive resistance vicinity.
Finding pullback Resistance on our MT4 Support & Resistance Indicator
Now that we’ve covered how swing excessive resistance seems like, let’s have a look at the subsequent most powerful resistance: the pullback resistance.
Pullback resistance is shaped when a swing low is damaged and rate makes a “pullback” to that preceding level. In the instance below, we can see that charge broke a swing low resistance turning it into a pullback resistance.
Finding Overlap Resistance on our MT4 Support & Resistance Indicator
Once we’ve got observed a pullback resistance, it is critical to preserve an eye fixed in this stage. Because as soon as fee reverses off it, it turns into an overlap resistance.
Pullback resistance will become a strong graphical overlap resistance if fee reverses off it. This indicates that there are alternatives extra bears than bulls at this key selection point.
Trial model works on AUDUSD, USDJPY and GBPUSD
Swing low support, pullback assist and overlap assist
Remember, as I referred to earlier, the Support is always under modern-day charge. Resistance is above price, help is underneath rate. Do now not confuse the 2.
Finding Swing Low Support with our MT4 Support and Resistance Indicator
We mentioned “swing sensitivity” in advance. This is basically the variety of bars to the choices left/right that makes up a primary swing low. The better this range, the stronger the choices assist.
Below is a simple instance of a swing low guide (inexperienced line) with swing sensitivity of 20. You will right now be aware that there aren’t many strains that are drawn on the choices chart as we filter a whole lot of the noise with a decent swing sensitivity range.
Combining multiple swing lows to create robust regions of aid
The key to locating sturdy areas of support is to combine a couple of swing low tiers together. Now, this is not one exact level. This may be very regularly a place. Our indicator scans the beyond and present to discover whether or not there have been other large swing low guide stages that occured near that area. If there is, it highlights the area on the choices chart.
When more than 1 swing low combine, it turns into a more potent level of assist.
Finding Pullback Support with our Support and Resistance Indicator
On pinnacle of locating swing low help areas, some other truly robust sign of assist is what we call the pullback support.
This is when a previous swing excessive is converted into a aid due to the fact charge had broken above it and is now dropping to check it once more.
In the choices image below, you may see how this works out.
How to find Overlap Support with our Support and Resistance Indicator
This pullback assist becomes a strong overlap guide if charge bounces off it the very first time it touches it. This suggests that there are alternatives greater bulls than bears at this key choice point.
Support and resistance indicator settings
How to tweak and optimize it.
If you haven’t watched the choices video I cited above, I incredibly suggest watching this video to understand how I would use the Support and Resistance indicator before we pass any similarly into understanding the way to tweak and adjust its settings.
There are a few settings that you have to recognize about this indicator to better assist you use it efficiently.
The multi-time body selector permits you to prompt different help/resistance lines from different time frames to be considered for your chart. In the image below, you may see that even though I am on my H1 chart, I can prompt the H4 assist/resistance tiers to peer if there are alternatives any degrees on the better time frame I may have missed out on. This resulted in a large swing excessive I might have ignored being proven.
SwingSensitivity : This is what number of bars you would need on the left/right of a excessive/low to create a swing high/low. This method that as an example, when you have 20 as this price, then the swing high might require 20 bars to the choices left and to the choices proper of it to be lower than it to create the choices swing high point. The higher this price, the stronger the swing highs/lows you identify.
InitialPips :What the choices indicator does is it takes these swing highs/lows and plots a line to locate whether it coincides with different swing highs/lows. The InitialPips price is the ‘buffer’ it uses to hit upon whether another swing high/low is near it. A cost of 5 would mean it scans five pips above and under the choices first swing excessive/low for every other swing excessive/low to reach it. The key concept here is to discover regions where multiple swing high/lows coincide.
1 min chart : 15 min chart : 315 min chart : 530 min chart : seventy one hr chart : 104 hr chart : 30
This isn’t a hard and speedy rule, as an alternative, the primary concept is to provide more scanning location for overlaps as the time-frame goes bigger.
FurtherPips :Once the second one swing excessive/low is reached, the choices indicator will use this new resistance/guide region and do a changed scan primarily based on FurtherPips. This works the choices equal manner as InitialPips.
1 min chart : 15 min chart : 315 min chart : 930 min chart : 151 hr chart : 254 hr chart : 50
This is not a tough and speedy rule, as an alternative, the principle concept is to offer greater scanning area for overlaps as the time-frame is going bigger.
BrokenCount :This cost scans how commonly the unique support/resistance recognized has been damaged. The more instances a assist/resistance stage is damaged, the choices weaker it’s miles. A cost of zero means that the degree can be broken only as soon as. If it’s far broken a 2d time, it disappears.
BrokenBars :This is the choices variety of bars that need to be closed under the aid/resistance degree for it to be considered virtually broken (links with BrokenCount above). The reason for this is once in a while rate assessments those support/resistance stages and bounces returned (like a doji). This really way the choices help/resistance degree is more potent and such a clear out permits us to save you such rate action from tricking us.
I prefer to maintain this at about three throughout all time frames.
ToggleStrength :This toggles the thin strains with only one swing high/low and the thicker lines with as a minimum 2 swing high/lows linked. This enables you choose out which can be straight away the choices stronger ranges to watch out for.
Here’s an photograph with out the ToggleStrength. Notice how there are numerous extra lines that have simply 1 swing excessive/low on it. These are pointed out by means of the choices green arrows.
Trial model works on AUDUSD, USDJPY and GBPUSD
How do i Install this?
It’s as simple as 1, 2, three!
The TFA Support and Resistance Indicator.ex4 need to be located for your “indicator” folder. To do this, open MT4 > File > Open Data Folder
The subsequent aspect you have to do is to enable your MT4 to permit professional advisors. On the choices top of your MT4, there may be a button referred to as “AutoTrading”. Ensure that it’s far green and now not red by using clicking on it.
This received’t make the choices indicator exchange for you – it’s there because there’s a few licensing safety on this indicator.
Once you’re completed with all that, you need to enable “chart shift” in order that the choices TFA aid and resistance indicator has some area to function and show you its ranges.
To try this, press F8 > Common > make sure “chart shift” is checked as visible inside the photo underneath.
Once you permit “chart shift”, this nudges your chart to the choices left supplying you with some space on the choices right for the support and resistance indicator to show the choices degrees and the time frame which the ranges are coming from.
You can regulate how a lot space you want on the choices right via sliding the choices little arrow left/proper as visible in the photo below.
Good alternate control to enhance your profitability
A appropriate approach is nothing without top alternate management.
Now that you have learnt how to alternate the use of aid and resistance together with five approaches on the way to greatly improve its accuracy, I advise you study up on the way to control your alternate to show yourself right into a worthwhile trader. This subject matter will cowl:
Increasing the electricity of the choices help and resistance indicator
Here are some approaches we substantially improve the choices accuracy and profitability of this strategy.
Now which you have diagnosed a support/resistance place, the following factor to do is to add in other elements to peer how strong it’s far. We like to use a holistic technique to assessing the energy of a guide/resistance level. Horizontal aid and resistance are graphical.
There are 5 different matters you may add that can’t only add exceptional dimensions to assessing the energy of these tiers, but also substantially enhance the chance of rate reacting off these degrees you have identified :
Using Fibonacci to improve your accuracy
Fibonacci retracements and extensions are the key
Firstly, you can greatly enhance the accuracy and profitability of your help and resistance trading strategy via the use of Fibonacci.
You can use the choices main element of Fibonacci Retracements and verify whether or not the choices guide and resistance tiers identified coincides with a key fibonacci retracement stage. If it does, that increases its electricity. The key ranges to observe out for are 23.6%, 38.2%, 50%, sixty one.eight%, seventy eight.6%, 127% and 161.8%.
I distinctly propose studying our manual on how to draw Fibonacci retracements correctly to higher apprehend and make use of this magical device.
Here’s an example of a key guide degree on AUDNZD lining up nicely with the choices 50% Fibonacci retracement stage :
True RSI to enhance your accuracy
Using the choices MT4 True RSI Indicator
So another way to improve the choices energy of a help/resistance level is to feature in the oscillator element by using making use of the various powerful approaches to examine the Relative Strength Index (RSI). We have an brilliant RSI Trading Strategy that when combined with Support & Resistance, proves to be a truely profitably trading approach.
Our proprietary MT4 True RSI Indicator achieves this honestly well by using figuring out the choices robust tiers in which price has traditionally bounced off. Here’s a image of it in movement:
True Stochastic to improve your accuracy
Using the MT4 True Stochastic Indicator
This approach is learnt after I changed into advising the buying and selling desks of the largest banks and establishments. Really exciting and effective!
You are capable of greatly enhance your accuracy while buying and selling with Support and Resistance by combining it together with our proprietary MT4 True Stochastic Indicator.
The trick is to find the hidden/true stochastic guide degree and spot the way it tallies with the aid level you located (vice versa for resistance). Below is an instance of how this looks as if and how it worked out perfectly.
Using Correlation to improve your accuracy
Correlation is like combining more than one portions of the jigsaw puzzle collectively to get a clearer image of what the market is telling you.
You can use correlation between forex pairs to substantially improve your buying and selling accuracy, particularly with support and resistance.
The trick here is knowing which forex pairs are strongly definitely or negatively correlated with each other.
For instance, EUR/USD is strongly negatively correlated with USD/CHF. This manner that after EUR/USD is going up, USD/CHF goes down.
Now, how can we use this records to trade better? Well, if we see a primary help degree (beneath cutting-edge fee) on EUR/USD, what does that suggest we must see on USD/CHF? If you guessed a first-rate resistance degree (above modern-day fee), you are proper?
The good judgment at the back of this is if EUR/USD goes to bounce, then USD/CHF ought to in addition drop considering that they flow in opposite instructions.
Below are examples of ways you can use correlation to improve the choices accuracy of your help and resistance ranges.
Using Price movement to improve your accuracy
Price action tells you what’s going on at the precise moment and is vital for assisting you decide whether the choices aid or resistance level is going to hold.
The magic in charge motion (with Japanese candlesticks) is that it tells you exactly what is happening in the meanwhile and from there, you may tell if the support or resistance degree is going to maintain.
I recommend you read our splendid in-depth article on our candlestick sample indicator together with what goes into calculating the suitable bullish and bearish reversal patterns.
What this means is that every so often, it seems like the aid stage isn’t going to hold (looks like it’s far going to get damaged). Price may have reached it and broke through it – at this factor, you’ll be forgiven to suppose that the choices help degree you discovered is not running.
However, before the bar is completed, you note that charge bureaucracy a bullish hammer candlestick pattern. This is a completely strong charge motion sign of a bullish jump that might be occurring,
So, what occurs for your support level now? Previously, you idea it become going to be broken because of how charge just broke past it. However, because of the choices latest rate movement formation, you as a substitute have extended confidence that your aid degree is powerful and you can play a jump from right here.
Trial version works on AUDUSD, USDJPY and GBPUSD
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