[Eric's Trading System] The Vertical Resistance Area
Updated
Introduction:
The Vertical Resistance Area can help us identify the entry opportunity when we make short trade. It is formed by at least three candlesticks:
1. bullish candlestick or bearish candlestick
2. bullish candlestick or bearish candlestick
3. bearish candlestick , the close price must lower than the low price of the second candlestick , meanwhile, there is a significant increase in volume , this is the most important requirement.
The third candlesticks help us identify whether there formed a vertical resistance area .
How to draw the vertical resistance area
1. the top should be the highest price of the second candlestick
2. the bottom should be the entity bottom of the second candlestick
You can adjust the resistance area flexibly.
Three Steps to Trade
1. Identify
2. Wait for the price raise back
3. Find a reversal signal in small time periods, such as inside-bar, pin-bar
Q&A
Q1. If the third candlestick close price higher than the high price of the second candlestick , but the volume didn't increase, should we identify it as the vertical support area?
A1. We can also look at it as the resistance area , but it is not as strong as we think, you should focus on the reaction when the price back the area
Q2. Can the trend always reverse at the resistance area?
A2. Of cause not, but it can help up improve our breakeven, we can trade with a lower stop loss.
Q3. Can the price always raise back?
A3. Not for sure, if we miss the opportunity, find the next
Hi, I'm Eric , a cryptocurrency trade enthusiast, focus on harmonic trading, I am going to share my trade though which will help me review and improve my trade system I think.
If you like my thought, please give me a like. Thanks
The Vertical Resistance Area can help us identify the entry opportunity when we make short trade. It is formed by at least three candlesticks:
1. bullish candlestick or bearish candlestick
2. bullish candlestick or bearish candlestick
3. bearish candlestick , the close price must lower than the low price of the second candlestick , meanwhile, there is a significant increase in volume , this is the most important requirement.
The third candlesticks help us identify whether there formed a vertical resistance area .
How to draw the vertical resistance area
1. the top should be the highest price of the second candlestick
2. the bottom should be the entity bottom of the second candlestick
You can adjust the resistance area flexibly.
Three Steps to Trade
1. Identify
2. Wait for the price raise back
3. Find a reversal signal in small time periods, such as inside-bar, pin-bar
Q&A
Q1. If the third candlestick close price higher than the high price of the second candlestick , but the volume didn't increase, should we identify it as the vertical support area?
A1. We can also look at it as the resistance area , but it is not as strong as we think, you should focus on the reaction when the price back the area
Q2. Can the trend always reverse at the resistance area?
A2. Of cause not, but it can help up improve our breakeven, we can trade with a lower stop loss.
Q3. Can the price always raise back?
A3. Not for sure, if we miss the opportunity, find the next
Hi, I'm Eric , a cryptocurrency trade enthusiast, focus on harmonic trading, I am going to share my trade though which will help me review and improve my trade system I think.
If you like my thought, please give me a like. Thanks
Note
example1:Note
example2:Note
example 3:Note
example 4:Note
Fail Case
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.