Resistance Trading Method

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 Resistance Trade Entry Method

In this blog we learn to identify resistance trading opportunity. This kind of setup formed many time in the market and has a very good risk to reward ratio. There are various kind of resistance in the market but in today blog we going to learn about three most important resistance in our trading setup.

  • SMA Support & Resistance zone
  • Consolidation zone Support & Resistance
  • Previous Support and Resistance 

Explation

  1. SMA is not a line, it is a zone, so here 200 SMA first acting as support and after breakout it is acting as resistance
  2. A consolidation zone act as support and resistance after breakout happen. so here we can see candles are falling to enter into zone.
  3. High and low of consolidation zone also a minor support and resistance of previous day trading day. So we are getting more conviction on trade.
  4. After breakout, multiple pin bar candle formed below consolidation zone, which is sign of weakness in trend.
In this trade, we can initiate short after first pin bar formed with stop loss above 200 SMA due to multiple confirmation from setup. Here 20-200 SMA, candlestick pattern and Price Action are happening at same moment so conviction of this trade should be high.

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