All language subtitles for 1. Basics of Support and Resistance Technical Analysis

Hello and welcome, everyone, in Section 2 of the course. In the first lecture,
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I start by introducing the concept of support and resistance trading.
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Whether you are a beginner or an experienced trader, I expect you to pay attention to this lecture
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as this information will help you to gradually build into the later parts of this course.
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Therefore, I do not advise skipping any of the information provided in these early lectures.
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Now, to understand support and resistance, let us first understand how markets work.
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As we all know, the changes in market price, whether you are trading in stocks, commodities or forex,
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are a result of constant battle between buyers and sellers.
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The bulls or the long traders always push the prices higher, whereas the bears or the short traders
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push prices lower.
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We also know that the price only travels in three directions: upwards, downwards or sideways.
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Interestingly, all markets spend more time trending sideways instead of moving up or down, irrespective
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of the time frame. This sideways price movement results in the formation of price support
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and price resistance.
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Price support is also known as price floor, where price reaches and bounces upwards within the
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sideways price movement.
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On the other hand, price resistance is called price ceiling, where price is pushed lower.
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Insiders or market professionals often use these price congestion zones as a build up for the next big
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move in the market.
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A price can oscillate many times between support and resistance before the trend either continues or
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reverses. Guys larger the time price spent within a support and resistance area,
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larger the following price move will be. This extended sideways price activity represents the levels
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of fear and greed of traders in that particular price region.
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You will learn more about the psychology of traders later in this lecture.
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You will also learn how support and resistance Price zones from the past become key technical levels
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to watch out for in the future.
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Therefore, as an experienced trader, you are only looking for three key things, and these are also
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the three key things you will learn in this strategy and in this course: 1. Identify the start of this
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sideways price activity on any security.
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Taking advantage of buying and selling opportunities available within this sideways price activity.
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Finally identify the breakout to capture the large buying or selling climax once this sideways price
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activity ends. As we progress systematically in this course, you will learn these key things in this
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course and you will also be able to implement them in your trading straightaway.
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Let us look at a diagrammatic representation and a couple of examples to understand what we have studied
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in this lecture.
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Guys, in this first example, we are looking at AUDUSD daily charts to understand
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the basics of support and resistance.
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Now, starting from this price low where the red arrow is, you can see that this forex pair has
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enjoyed a very nice rally in price in recent past.
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Next step is to label the obvious sideways price activity on this this pair.
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This is our first price movement sideways, as you see here.
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Similarly I will label the remaining price activity on this chart, the key thing to note here is that
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sideways market activity is clearly visible to the naked eye.
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so do not stress yourself too while labelling them.
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If it is not obvious, it's not their.
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Now, I will switch to one lower timeframe to zoom in on the selected price areas.
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Guys, you will notice here that price showed very less of no violation of high and low of these
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price zones.
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This is because the buyers and sellers are most active at these price zones.
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I will teach you how this sidewys price activity offers high probability trade opportunities when
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correctly studied.
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Now that we understand how a sideways price activity looks in an uptrend, let us understand the support
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and resistance in each of these.
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As we all know, resistance is called ceiling, whereas the support is called the floor of the
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sideways price activity.
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The final thing I want you to notice here is that how price moved sharply once this support and resistance
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consolidation phase ends.
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This attribute is linked to all markets on all timeframes because the market pauses during this consolidation
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phases before it advances either in the direction of the previous trend or it reverses
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to start a new trend.
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Now, let us quickly study support and resistance in a downtrend.
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Guys, we're looking at USDCAD daily charts.
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From this price high, you can see that the overall trend is downtrend as we speak.
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Once again, I will label all the clear sideways price movement on this pair.
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I will quickly switch to one lower time frame on MetaTrader 4 to see how price candles respected
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the boundaries of sideways price movement.
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Similar to the previous example, I will label the support and resistance on this pair.
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Finally look, the trend continued after these first three consolidation phase. After all, price
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can only break out to continue the original trend or the price reverses to initiate a new trend.
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Guys, this also concludes this lecture.
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This is all you need to know for the time being, please understand these basic concepts of support
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and resistance trading carefully before we advance
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ahead to study choosing the right timeframe to make consistent profits using this strategy.