Welcome to Support Resistance Flips! In this lesson, coach Daniel will guide you through the importance of Support Resistance flips, which can be a great tool for identifying changes in Market Structure.
TIMESTAMPS
00:00 – INTRODUCTION
00:23 – UTILITY
Support and resistance are some of the strongest levels in trading.
They are ‘simple’ in theory, but extremely effective in practice.
00:39 – IMPLEMENTATION
A support line when broken to the downside becomes resistance.
A resistance line when broken to the upside becomes support.
Look for backtests of the S/R flip for confirmation.
If a level is backtested and lost, this can provide a Failed Auction trading setup.
Trendlines, when broken, are an early sign of a total trend reversal (coming from Elliott Wave theory).
Used for patterns such as triangles: once a triangle line is broken, price should not come back into the triangle. Rather, it should flip the support line into resistance.
If the flip fails, then expect a large countermove.
🔎 01:55 Here we can see an example of a S/R flip.
🔎 02:29 Here we can see an example of a R/S flip.
S/R flips can happen on levels such as the 0.382 Fibonacci level, Speed fans, or a Pitchfork.
If we see extended consolidation at resistance before a breakout then we are more likely to see that level flip into support.
Confluence is always very important when looking to trade a S/R flip.
05:43 – TIPS & TRICKS
★ Look for Failed Auctions when a S/R flip fails after a breakout.
★ Upon breaking a level, check Orderflow for volume and delta statistics.
06:29 – FINAL THOUGHTS