How To Tell When Support Will Break? (Must Watch)

Summary

This video script delves into price action trading strategies, focusing on support and resistance levels. It explains the significance of 'power moves' and 'crawler moves' in predicting price reversals or breakdowns. The presenter shares insights on entry and exit strategies using bearish engulfing patterns, Fibonacci extensions, and moving averages. Additionally, the script hints at a comprehensive trading guide available for purchase, promising to unlock more advanced techniques for consistent profitability.

Takeaways

• 📈 The speaker introduces two types of price movements at support or resistance levels: 'power moves' and 'crawler moves', which are significant for predicting price reversals or breakdowns.
• 🔴 A 'power move' is characterized by large bearish or bullish candlesticks approaching support or resistance, indicating a potential swift reversal in the market.
• 🔵 A 'crawler move' is identified by a series of lower highs approaching support or higher lows approaching resistance, suggesting a weakening trend and possible breakdown or breakout.
• 💡 Traders often take profits when a strong move into support or resistance occurs, creating buying or selling pressure that can influence price movements.
• 📉 The fear of giving back profits can lead traders to exit positions, contributing to buying pressure that might push prices higher after a power move into support.
• 📊 The absence of immediate obstacles after a strong move into support or resistance can result in a rapid price reversal, as there's no immediate resistance to counter the move.
• 📌 The speaker emphasizes not trading every power move due to the need for additional confirming factors before entering a trade.
• ✅ The script illustrates a trading strategy using a bearish engulfing pattern as an entry trigger and the ATR indicator to set stop-loss levels.
• 🔍 The Fibonacci extension tool is introduced to identify potential exit points by projecting price movements beyond the immediate support or resistance levels.
• 🌐 The strategies discussed are applicable across various timeframes, from the four-hour chart to the weekly chart, demonstrating the flexibility of the trading approach.
• 📚 The speaker promotes a book, 'Price Action Trading Secrets', which delves deeper into strategies for consistently profitable trading, including risk management and breakout trading techniques.

Q & A

What are the two types of moves discussed in the script when the price approaches support or resistance?

The two types of moves are 'power move' and 'crawler move'. A power move is characterized by a series of large bearish or bullish candles approaching support or resistance, respectively. A crawler move is indicated by a series of lower highs into support or higher lows into resistance, showing a gradual weakening of the price movement.

Why is a power move significant when it comes to trading?

A power move is significant because it can lead to a swift reversal in the market. Traders who are in profit may fear giving back their gains and look to take profits, inducing buying pressure. Additionally, technical traders may see the price at a support or resistance level and decide to enter trades, further increasing buying or selling pressure. Lastly, if the next obstacle (resistance or support) is far away, it allows for a potential large move in the direction of the power move without immediate obstacles.

What does a crawler move into support indicate about the market sentiment?

A crawler move into support indicates a sign of weakness in the market. It shows that selling pressure is increasing as sellers are willing to sell at lower prices, suggesting they expect support to break. This can lead to a breakdown in price as new traders may place their stop losses just below the support level, which, if triggered, can add to the selling pressure.

How can a trader use the Fibonacci extension tool to set a target for a trade?

A trader can use the Fibonacci extension tool to project where the price might go after a breakout or a significant move. By drawing the tool from a swing high to a swing low and then back to a higher high, traders can look to exit just before the 127% extension level, which is considered a common retracement level where the price may consolidate or reverse.

What is the strategy for entering a trade when the market is in a downtrend and approaching resistance?

When the market is in a downtrend and approaching resistance, a trader can look for a valid entry trigger such as a bearish engulfing pattern or a false break above resistance. The trade is entered on the next candle open after the trigger. The stop loss is set a distance away from the resistance, using the ATR indicator to determine the distance, and targets are set at recent swing lows or using the Fibonacci extension tool for a more aggressive target.

How does the concept of a 'failed breakout' relate to setting a stop loss in a trade?

A 'failed breakout' occurs when the market breaks a level of support or resistance but then reverses back into the previous range. To set a stop loss in such a scenario, a trader might place it just below the resistance level if going long, assuming that if the breakout fails and the price returns to the range, the trade should be closed to limit losses.

What is the reasoning behind not moving a stop loss to breakeven too early in a trade?

Moving a stop loss to breakeven too early in a trade can be risky because there is no immediate obstacle to prevent the market from reversing and hitting the stop loss, especially if the trade is in an area of resistance. It's better to leave the stop loss at a logical level to give the market room to move and potentially hit a more favorable target.

How can a trader identify a potential trading opportunity in a market that is not breaking out but consolidating?

In a market that is not breaking out but consolidating, a trader can look for a power move into an area of support. This could indicate a potential reversal and buying opportunity, aiming to capture a swing up to the resistance level. Traders might look for bullish reversal candlestick patterns like a hammer as a signal to enter such a trade.

What is the importance of managing risk and setting targets in trading as discussed in the script?

Managing risk and setting targets are crucial in trading to protect capital and ensure that trades are executed with a clear plan. This includes setting stop losses to limit potential losses and setting multiple targets to take profits at different levels, which can help in securing profits while allowing for the potential of larger gains.

How can a trader determine the strength of a market trend using the concepts discussed in the script?

A trader can determine the strength of a market trend by observing the price action near support and resistance levels. A series of higher lows into resistance indicates buying strength, suggesting the market is likely to break out higher. Conversely, a series of lower highs into support indicates selling pressure and potential weakness, suggesting the market may break down.

Outlines

00:00

📊 Understanding Price Action at Support and Resistance

This paragraph introduces the concept of price action at support and resistance levels. The speaker engages the audience by asking whether the price will reverse higher from support or break down. It explains the importance of recognizing two types of moves: 'power moves' characterized by strong bearish or bullish candles approaching support or resistance, and their significance in trading due to the behavior of traders in profit and the potential for swift reversals or breakouts. The paragraph also sets the stage for a more in-depth explanation of these concepts and a trading strategy to be shared later in the script.

05:01

🐉 The Power and Crawler Moves in Trading

The speaker delves into the specifics of 'power moves' and 'crawler moves,' two distinct types of price action near support and resistance levels. A power move is marked by large candlesticks approaching these levels, often indicating a strong trend that could lead to a swift reversal or breakout. Conversely, a crawler move is characterized by a series of lower highs or higher lows, suggesting a weakening trend that may result in a breakdown or breakout. The paragraph emphasizes the psychological aspects affecting traders and the potential trading opportunities presented by these moves.

10:02

🎯 Trading Strategy: Power Move Entry and Exit

This section outlines a trading strategy focusing on the power move into resistance. The speaker describes a bearish engulfing pattern as a valid entry signal and discusses setting a stop loss using the ATR indicator to avoid being stopped out prematurely. The strategy includes setting two take-profit levels: a conservative target at a recent swing low and a more aggressive target using the 127% Fibonacci extension. The speaker also addresses the importance of not moving the stop loss to breakeven too early, which could result in missing out on potential profits.

15:03

🌐 Applying Price Action Strategies Across Time Frames

The speaker illustrates how the discussed price action strategies can be applied across different time frames, using an example of the USD/INR currency pair on a weekly chart. They highlight a potential long entry after a breakout and closure above resistance, with a stop loss set just below the resistance level. The paragraph also covers the use of a 20-period moving average as an exit signal, demonstrating how to capture profits in a long-term uptrend and manage risk effectively.

20:05

📚 Bonus Trading Insights and Resources

In the final paragraph, the speaker offers additional insights into potential trading opportunities, such as looking for bullish reversal patterns like a hammer candlestick at support levels. They also promote a book titled 'Price Action Trading Secrets,' which is said to contain comprehensive trading strategies and insights on price action trading. The book is offered for purchase, including shipping, and is promoted as a valuable resource for traders looking to improve their skills.

Keywords

💡Price Reversal

Price reversal refers to a change in the direction of the price of a security, from moving upward to moving downward, or vice versa. In the video, the concept is central to understanding potential trading opportunities, especially when the price approaches areas of support or resistance. The speaker discusses how to predict whether the price will reverse higher from support or break down lower.

💡Support and Resistance

Support and resistance are levels on a price chart that tend to have a higher concentration of buying or selling pressure, respectively. In the video, the speaker explains how to identify these levels and use them to anticipate potential price reversals or breakouts, which are key for making trading decisions.

💡Power Move

A power move is a term used to describe a strong price action that approaches either support or resistance. In the script, the speaker illustrates a power move with 'big bearish rate candles coming into support' or 'big green candles approaching resistance', indicating a potential for a swift reversal in the market direction.

💡Fear of Giving Back Profits

This concept relates to the psychological aspect of trading where traders who are in profit fear losing their gains. The video script mentions that traders who are short may take profits when they see a power move into support, as they fear the market might reverse and erode their profits.

💡Crawler Move

A crawler move is characterized by a series of lower highs approaching support or higher lows approaching resistance, indicating a gradual weakening of the price's upward or downward momentum. The speaker uses this term to describe a move that often precedes a breakdown in price, as seen in the script where it is associated with selling pressure and potential for a downward move.

💡Breakdown

A breakdown occurs when the price of a security falls below a support level, indicating a bearish trend. The video discusses the conditions under which a breakdown is likely, such as a crawler move into support, and how traders can anticipate and trade this scenario.

💡Breakout

A breakout is when the price of a security moves above a resistance level, signaling a potential uptrend. The script explains how to identify valid breakout signals and strategize entry and exit points for trades that aim to capitalize on the breakout.

💡Fibonacci Extension

Fibonacci extension is a technical analysis tool used to identify potential price targets during a trend. In the video, the speaker uses the 127% Fibonacci extension as a target for taking profits on a trade, providing an objective way to determine where the price might reverse after a breakout.

💡Stop Loss

A stop loss is an order placed with a broker to sell a security when it reaches a certain price. The video script discusses setting stop loss levels to manage risk, such as placing it one ATR away from a resistance level or below the low of support, depending on the trade scenario.

💡Risk Management

Risk management in trading involves the process of identifying, analyzing, and accepting or mitigating unwanted risks. The script emphasizes the importance of risk management through strategies like setting stop losses and using ATR values to ensure that trades are not stopped out prematurely.

💡Candlestick Patterns

Candlestick patterns are graphical representations of price movements over a set time period and are used to predict future price movements. The speaker mentions bullish reversal candlestick patterns like the hammer as potential entry signals for trades in the script.

Highlights

Introduction to support and resistance concepts in trading.

Understanding the importance of price action at support and resistance levels.

Definition and explanation of a 'power move' into support or resistance.

Illustration of a power move with a chart example.

Significance of a power move due to fear of giving back profits and induced buying pressure.

Explanation of how a strong power move can lead to swift reversals.

Introduction of the 'crawler move' and its implications for market direction.

Difference between a power move and a crawler move in terms of market strength.

Analysis of the impact of stop-loss orders on market movement.

Strategies for trading power moves in bull and bear markets.

Use of the ATR indicator for setting stop-loss levels.

Setting multiple targets for trades using recent swing lows and Fibonacci extensions.

Explanation of a trading strategy using a bearish engulfing pattern as an entry trigger.

Using a 20-period moving average as an exit strategy in a long-term uptrend.

Identifying potential trading opportunities in a multi-decade uptrend.

Strategies for handling trades when the market consolidates and moves lower.

Book recommendation 'Price Action Trading Secrets' for further learning on trading strategies.

Transcripts

hey hey what's up my friend so have a

look at this chart over here and let me

ask you do you think the price will

reverse higher from support or will the

price break down I'll give you five

seconds to think about this 205 okay

let's have a look at another example

what about this one so notice how the

price comes into support do you think

it's going to reverse up higher or will

the market or the price break down lower

let me give you 10 seconds

Okay so to know whether the price is

likely to break out of support or will

it reverse from support right you must

first understand the two types of move

right the two types of moves right when

the price approach support of resistance

okay the first move that I want you to

learn is what I call a power move so a

power move into support is where you

notice a series of you know big bearish

rate candles coming into support so let

me give you a quick illustration so

let's say Market is in a Range it goes

up comes down goes up comes down goes up

and then it starts coming down right

this is a big red candle right let's you

know bold this this is another big red

candle right coming into this area of

support so this is what we call a power

move I'll share with you a chart example

later on so you can understand it better

but in the meantime right a power move

into resistance is just the inverses

where you see a series of big green

candles approaching resistance so why is

the power move significant okay so we'll

get to that right but first this is how

it looks like so this is what I call a

power move notice the big red candles

approaching this area of support so why

is this significant right for a few

reasons number one

imagine that someone who is uh short

right at this candle or at this area of

resistance the market

in a few moments quickly went in their

favor so they're already sitting in

profits maybe a thousand dollars two

thousand dollars so what happens is that

this group of Traders are they will fear

fear of giving giving back their profits

right have you ever remember you know

you hold on to a trade so long you watch

your profits from a thousand dollars you

know trickle down to 800 to 700 you

continue holding until you hit your stop

loss right you've got nothing out of it

so there's this fear of giving back

their profit so traders who are short

right they have this fear of giving back

their profit so this is why they will

look to take profits

and that right would help induce buying

pressure so when you are short and you

exit the position it's actually a buy

order a buy order would create buying

pressure to push the price up higher the

second reason why right uh a power move

into support is significant is because

it's coming into this obvious area of

support right and Traders who you know

use technical analysis oh the prices at

support right now let's buy guess what

that induces buying pressure as well and

the third point is very important pay

attention

it's this whenever you see a strong

power move coming into an area of value

like you know support resistance Etc

the reversal can be just as Swift right

towards the upside why is that it's

because pay attention it's because there

is no obstacle in the way or rather the

obstacle right is quite far away okay so

if you think about this let's say

someone were to buy at this area of

support okay let's say he buy here and

ask yourself right if you understand

Market structure price structure where

is the next area of resistance it's

actually somewhere here so you can see

that from here all the way up to here

this is your potential profit so you can

see that your next obstacle is actually

actually quite far away so there's no

like obstacle in the way you know having

to induce selling pressure to push the

price down lower so because obstacle is

pretty far away over here so this is why

when you see a power move into support

right uh there are times right where the

reversal could be just as Swift right

towards the upside so here's another

example of a power move into resistance

so again the concept is the same the

only difference is that you know now

it's just a power move into resistance

you're seeing a c a series of green

candles into resistance now one thing to

be clear is that I don't just trade

every Power move coming to support and

resistance because they're not you know

not all of them will reverse so later on

I'll share with you how to actually

trade power move in fact I'll teach you

a relatively simple but powerful support

and resistance trading strategy so you

can profit in blue and bad markets

okay moving on I want to share with you

the second type of move the crawler move

right so what is this so when you see a

crawler move into support is where you

get a series of lower highs into support

it looks something like this so let's

say this is an area of support Market

goes up comes down goes up comes down

goes up comes down goes up comes down

and each

each one

rarely you notice that it gets weaker

and weaker regard because the the upside

right gets shorter and shorter and if

you look from left to right notice a

series of lower highs lower highs lower

highs so this is what we mean by lower

highs into support a crawler move into

support likewise if you see a crawler

move into resistance you can expect a

series of higher lows into resistance so

let me give you an example so this is

what I call a

a crawler move into support right notice

this over here how the market right made

a series of lower highs lower highs into

this area of support so usually

when I see a crawler move into support

right this to me is a sign of weakness

okay or rather this tells me that

selling pressure is stepping in why is

that and how do I know that because you

can see right that the sellers they are

willing to sell at this and lower prices

so imagine if you are a seller and

you're selling close to resistance it

doesn't quite make sense right unless

you think

okay so if support does break then yeah

looking back yeah this is a pretty good

price to short that but if you don't

think so support will break then you

know it doesn't quite make sense to shot

so near support so clearly the sellers

are confident right they're willing to

sell at this lower prices because they

expect support to break so when you

notice a series of lower highs into

support more often than not it usually

lead to a breakdown and that's not all

because

naive Traders or new Traders whenever

they see oh man Raina look the price is

coming to support guess what they'll buy

and where would they put their stop loss

they put their stop loss just below the

lows of support below the loaves of

support right so if enough new Traders

do that and enough

stop loss right it's below this area of

support right this again right add fuel

to the fire because if you think about

this someone who is long

their stop loss right is in essence a

short order right to get out of their

losing trade so if the price goes down

and hit their stop loss which is a short

on the debt feels even more selling

pressure right causing the price to hit

down lower so for this few reasons which

I shared with you right this crawler

move right a series of lower highs into

support right is usually a sign of

weakness or rather uh sign that you know

that sellers are about to drive the

price lower on the other hand right if

you see a series of higher lows into

resistance so you can see over here a

series of you know higher low higher low

high low high yeah low I had to do that

right a series of higher low into

resistance is a sign of strength okay so

why is that again the inverse is true

because you can see that the buyers

they're willing initially they bought

over here they push the price up higher

Market makes a pullback they buy this

lows it goes up higher

pull back by this lows then it goes up

higher make another pullback by this low

so you can see that each subsequent

lower is higher than the one before so

if you think about this right who in the

right frame of mind wants to buy just in

front of resistance unless you are

fairly considered that hey you know

resistance will break they know the

price is likely to break out higher so

this tells you that you know buying

pressure is stepping in right I think

they believe that they are relatively

confident hey the market is about to

break out higher so that's why they're

willing to buy at this higher prices and

more often than not right when you see a

series of higher lows coming into

resistance the market is likely to break

out now let's do a super quick recap

number one the market could reverse

after a power move into support or

resistance right as I've explained why

earlier however we don't trade every

Power move or trade the reversal right

just because a power move come into

support there's a one or two other

things that I still look out for and

I'll explain to you what it is right

before I trade a power move and likewise

right uh or not moving on right the

market could also break up after a

crawler move into support or resistance

in other words a series of fire lows

into resistance or a series of lower

highs into support now moving on I want

to share with you uh using these two

concepts you've learned right I want to

share with you a couple of trading

strategies that I use right to profit in

Bull and Bear market so let's get to it

now let's have a look at another example

shall we so again the May formula I'll

just do a quick recap here in case you

know some of you have short-term memory

like me m a e

what is the market structure that you're

seeing on this chart over here this is

the New Zealand Canadian the four hour

time frame what is the market structure

downtrend right great right Market is in

a downtrend so you know that the market

is in a downtrend where will you look

right to trade from where is the area of

value that you want to pay attention to

in this case a real value is at

resistance fantastic right so let's

cover this first two so in the market is

in the downtrend area a value I'll

probably highlight this one over here

okay there's probably the key one

they'll pay attention to and let me just

change this to Black right so we don't

get confused later on with our entries

and exit okay and again for those of you

who prefer to have it drawn as a

rectangle you can you probably look

something like this right as an area on

your chart right that's perfectly fine

so all that's left to do or rather the

next thing to do is to wait for the

market to come towards your area of

value or in this case resistance so you

can see the market hit up into

resistance okay breaks into resistance

at this point and this candle over here

we have a valid entry trigger this is

what we actually call a bearish

engulfing pattern this the story behind

it is similar to a shooting star pattern

right where the the bias were initially

in control and then they quickly write

code uh disrupted and the market got

pushed down lower by the seller closing

below resistance also actually you can

see it's actually actually a false break

as well the market actually took out

this highs and quickly reverse back in

to below resistance this looks like

number one but anyway yeah so this is a

valid entry trigger to go long telling

you that the sellers are in control so

what you can do is again to enter on the

next candle open so again uh the next

candle open at this price point let's

put this as green right to 6 near to

signify

that is our entry point okay I know this

is quite a few black lines over here I'm

going to remove some of them so you can

see better okay now what about our stop

loss so in this case again you can pull

out the ATR indicator the average true

range indicator I'll just do this one

more time so what we are trying to do

over here is to set our stop loss a

distance away from the resistance

because we want to get stopped up

prematurely so what you'll do is again

find out what is the high over here and

add on right by this number of uh ATR

value in this case is about 45 Pips so

let's do a quick calculation the high of

this candle currently it shows that it's

about uh let's see seven eight eight

five okay so 7885 you plus 45 Pips right

that gives you 7930 so your stop loss

will be placed at 0.7930 so I'll change

this to rate okay and 0.7930 got it okay

so that is your stop loss level all

right this over here is your stop loss

so basically how you interpret that stop

loss level is that from this high

one ATR okay get on one ATR is equals to

this level that you're seeing on the

chart over here next thing right where

is your target so if you look at Target

right there are two levels that showing

up over here one is this recent swing

low and this one is more of an extreme

further away right the swing low so in

this case usually I like to have a first

a conservative Target over here so in

this case you can actually have your

trade right all exit at this swing low

there's a perfectly you know valid uh

thought process

okay but at the same time right let me

just remove the indicator at the same

time some of you might be thinking but

right now if you look at this market

right if you look back this Market is

actually in the downtrend right now and

the price tends to break below this low

break below this low break below this

low because you look at this the price

over here it breaks below this low and

then it makes a pullback so won't we

like you know be giving up some

potential profits because we can still

look to capture this additional bit of

the move right as the market breaks down

lower lower right so that's a fair

thought right so actually what you can

do in this case is actually to have two

Targets one is a more conservative

Target and one is a further Target so

let me share with you how to do this so

in this case your first Target can be

over here okay this is your first Target

let me just change this to Blue let's

call this target one right tp1 okay and

you can have a second further Target

right as you know the market is in a

downtrend it could break below the lows

and go a little bit further so in this

case this is the extreme low over here

for all you know this Market could

possibly you know break below this

extreme low right and then make a

pullback so you want to kind of like

take your

somewhere about here right where you can

get the most bang of for your buck well

how do you do this all right so how can

you do this objectively so what you can

do is you can use a tool right called a

Fibonacci extension right and look to uh

exit right at a just before the 127

extension so I'll just get out show you

what I mean look at Trend based flip

extension click on this you draw it from

the swing High to the swing low and back

up high again swing this is the swing

High down to this extreme low and then

up higher again okay so once you do that

you can see that over here I can see

over here other over here I'll just

manipulate this chart a little bit okay

you can see over here I want you to pay

attention to this level over here this

is what we call the 127 extension and

over here is an objective way where you

can look to set your second target so

I'll just draw a second blue line over

here just before the 127 extension maybe

somewhere about here okay so let's see

what happens next right so in this case

right uh I'll just remove the feedback

extension since it looks a bit messy but

at least you know you know how this

second blue line come about we actually

use the Fibonacci extension to kind of

like project right where the price could

go right so we can just take advantage

of that extra little Pips right as the

market breaks down lower so what I mean

by this is that example this is a swing

low Market break this Swing Low by quite

a little bit before it makes a pullback

so the question is where exactly right

do you take profits right as the market

breaks down lower so this Fibonacci

extension gives you that a little bit of

objectivity to it okay so I'm just going

to remove this extension first and see

what happens so in this case the market

you can see that it pretty much went

lower over here and hit our first Target

relatively quickly Market continue down

lower

over here almost reaching our Target

here and didn't quite and now it's

making a pullback

and as you can see this is how the

market is right now so at this point in

time right so what you can do is

actually you know your stops really in

place your first Target is really taken

and your stop loss is already at a

logical level it's still over here so

what you can do is again leave your stop

loss as it is right and let the market

either you know hit your this second

target or hit your stop loss right

because there's really no point you know

trying to shift your stop loss right to

break even because again there's a good

chance you could get your stop loss hit

at break even so what many Traders like

to do in this case is that they set

their stop loss to let's say Break Even

they bring their stop loss down to their

entry point but to me that's not really

very logical because there is no like

kind of like barrier right because this

is an area of resistance if the market

comes up higher and it hits down lower

you can see that in this case you will

get stopped up on your trade right on

the second half of the position and the

market eventually hits your Target and

you're not in it because you know you

got you're given to your fear so usually

what I do is that you know my stop loss

is really at a logical level I'll leave

it as it is my target is uh at this

point over here I know I almost got

filled on the trade but I didn't quite

so I'm just gonna leave my plan as it is

either it's going to hit my stop loss or

hit my target I already taken partial

profits on this first Target over here

so even if the second position hit my

stop loss hey guess what this overall

trade will not really be a loser it

probably could be more of a break even

trade or a very very tiny loss so at

least that's my top process to how I

would you know go about handling this

trade

alrighty let's have a look at another

example in fact I'll give you five

seconds look at this chart and analyze

right where is the potential trading

opportunity I'll give you five seconds

three four five okay let's get started

right so this is actually a weekly time

frame dollar against the Indian rupee on

the weekly timeframe so I don't usually

trade the weekly timeframe but you can

see that the strategies I'm sharing with

you right can be traded across different

time frames so this one over here right

notice this is the area of resistance

and what do you what price action do you

see as the price approach resistance if

you say a crawler move into resistance

you're right all right so you can see a

series of higher lows higher lows coming

into this area of resistance so if you

ask me right there's a good chance this

Market could break out higher so now

where exactly do we enter where do we

set our stop loss how do we exit the

right this trade if it moves in our

favor fantastic question so let's get to

it so one potential a trading setup that

you can consider is to have the market

right break and close above resistance

so let's say

uh let's say I just have this line over

here right horizontal line let's put it

here in Black let's say if the market

area of resistance and it breaks and

close above it that will be a valid

entry trigger to go long right so you

can enter on the next candle open let's

say somewhere here is for entry

now what about your stop loss so where

at this point right would this breakout

trade be so-called a failed breakout

right there are a couple of ways you can

set your stop loss but if you want to be

a little bit more aggressive you want to

get a

tighter risk to reward a rather a more

favorable risk to reward on your trade

you can set your stop loss right

somewhere about here okay around the 82

price point because if you think about

this if the market reaches your entry

price over here it breaks out and the

next few candles it goes back into this

uh so-called range you know that the

breakout is filled right if not you know

it wouldn't have you know come back into

this range or you know into back into

this ascending triangle pattern if you

want to call it right so you can set

your stop loss somewhere about here now

what about your exits where do you take

profits if the market moves in your

favor great question right and because

if you look at this Market structure of

this currency pair you look left it's

quite insane it's actually in a multi

decade right long-term uptrend I'm just

going to zoom out you can see since the

1980s right the dollar against the

Indian rupees and bring them few very

long-term uptrend so of course I don't

expect you to write such a long-term

uptrend Because by the time you'll be a

grandpa already so what you can do

instead is just to write a short-term

uptrend and one way to go about it is to

actually use the 20 period moving

average so you can see this red line

over here so what happens is if the

market let's say it breaks out the

higher okay you go long names goes up

higher in your favor then this red line

right will naturally the 20 period

moving average the 20-week moving

average will naturally move up along

with it and if it closes below it okay

let's say closes below the 20 week

moving average then you exit the trade

so I'll just take you back a few

examples you can see right it has

happened a few times over the last few

years right so you see for example just

illustration purposes yeah okay so if

you look at this this let's say we had a

breakout over here okay let's say your

stop loss is you know within below

resistance let's say somewhere here okay

and notice

uh let's say this is the exit that you

have right notice the market at this

candle pretty much break and close below

the uh 20-week moving average so this is

where you exit over here so in other

words in this particular example okay

cherry pick example dirt as you can see

your entry is here e right and your TP

is kind of like over here right you'll

take profit is over here so you actually

did write this kind of like short wave

up higher what if right what if right is

a bonus section right what if the market

doesn't break out in fact it's not

consolidate and comes down lower

well actually if you've been paying

attention earlier there's another

potential trading opportunity right let

me highlight it to you so let's say okay

uh you know that this is an area of

support

so if the market comes let's say a power

move right just learn the power move

boom right comes into this area of

support guess what are you looking too

long or short Market

give you three seconds one two three

answer is you should look for buying

opportunities because you can look for a

reversal right up higher

and thereby allowing you to capture that

one swing up higher into resistance and

again with proper uh trade management

it's possible right to exit a portion of

your trade at this highs and then to let

the remaining half right even higher so

I don't get into this uh Starfire

because it's outside of this scope of

this video but what you can look for

right for a potential trading

opportunity in this case is again very

simple I'll just walk you through

quickly let's say the market comes into

this uh area of support it can look for

something as simple like a hammer

Candlestick pattern a bullish reversal

Candlestick pattern you go along on the

next candle open stops the distance

below the lows possible Target just

before resistance right you know to

capture that first Target yeah okay if

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