Road blocks

Here's what we'll learn

  1. Draw weekly trend lines
  2. Support and resistance
  3. How to make informed decisions by being aware of potential roadblocks
  4. Higher time frames - 3 or more reversal touches == strong
  5. Understanding that more powerful S&4 levels have price reversals both to the upside and downside
  6. The importance of becoming proficient at identifying S&R levels.

What is a road block

Anything that could block your trade between entry and take profit target.

Why learn this ?

  • Helps us to create an exit strategy.
  • Adjusting take profit levels
  • Analyzing market structure
  • Make more informed trading decisions
  • Increase your chance of success

What will happen if you don't learn this.

  • You enter trades that you shouldn't have entered
  • Mysterious price reversals taking you by surprise.

Once you learn this, you will:

  1. Make informed decisions about each trade
  2. Keep more of your profits
  3. Be more confident and proactively anticipate market movement.

Glossary

  • Trendlines: A graphical representation created by connecting pivot highs or pivot lows to illustrate teh mdominant price direction.
  • Economic news events: Release of market-moving reports such as CPI, jobless claims, etc.
  • Support & Resistance: Support is a price level in trading where buying pressure is expected to prevent further decline, acting as a floor for the asset's price.

Steps for mastering road blocks

Step 1: Trendlines

A diagonal line where price "bounces" from at least 2 times.

  1. Open the chart on your chosen instrument
  2. Go to the weekly time frame, and scrunch it up as far back as it'll go, eg to 1983 :o
  3. Establish the high and the low of entire price action
  4. Select the trendline tool; make sure "extend right" is enabled.
  5. Draw the trend lines from the highest pivot high, to a subsequent pivot highs.
  6. Same for lows.
  7. Repeat for the second most significant high/low, and so on until all highs and lows that can be connected, without going through candles are connected.

Step 2: Support and Resistance - Part 1

A horizontal line where price "bounces" from at least 2 times.

  1. When doing a trade, mark the entry and the pattern completion level with horizontal lines extended left
  2. Go on time frame up
  3. Check for horizontal lines between those two where price has bounced off of it 3 times or more. 3.1. If the line has been both support and resistance, it is stronger.
  4. Mark the support and resistance lines with a horizontal line.