welcome to this video on forex trading
for beginners and this is Barry Burns
with top trading. today we're gonna
tackle a topic that is one of the first
things that ever learned when I took a
formal class and technical analysis but
I rely on it heavily to this day 49
years later well actually my dad started
teaching me and I was eight years old so
I think I took that class like 20 years
later but still a long time ago long
time ago and this is very basic stuff
but as is true with many things whether
it's sports or academics or just life in
general the basic things are often the
best and so this is good with your
beginner intermediate or advanced and
basically what we're talking about is
looking for support and resistance and
major highs and lows in the market that
just stand out to the naked eye and the
market logic when i call market logic of
that is meaning why would this actually
work
what's the reasoning behind why this
works in other words not just theory but
there's a practical reason why would
work is very simple that markets are
essentially a big huge international
auction place and the more people that
see a supporter resistance level the
more participants are likely to respond
to that support resistance level to buy
off of it to sell off of it take profits
into it etc and so have has a
self-fulfilling prophecy
it's kind of funny some people say well
that's just a self-fulfilling prophecy
and my point as well but that's exactly
why it works so why would you diminish
that it's just a self-fulfilling
prophecy in the markets in an auction
place
yeah people get excited about something
where they're not interested in that
affects the price whether it's driven up
or whether become stagnant has to lower
that's exactly how markets work so a
couple of points here now I have a
mathematical formula that i use for
drying these IVs automatically drawn on
but the basic concept again is what
we'll most people see what will the vast
majority of the people see what just
stands out on a chart that everyone is
going to see that as a major hi
yeah we see this whole level in here as
a high that really stands out in the
market now this is the top dog training
principles
of three the principle of three and
again it has a market logic to it so
we've got high here market comes down to
retest that once goes back retest twice
comes back retest of the third time if
the market does not go above that level
after three retests it's likely not
going to go and again it's just the
psychology the mass psychology should
say of the markets where people are
saying you know the market is retested
this price level now three times and it
hasn't broken above it
it's probably not going to why these
people aren't willing to pay more than
that they don't see more value than that
price level 4 in this case the dollar um
and so we've tried three times where we
tried three times not going so probably
not going to go and so it goes down now
where does it go
it goes to the very next support level
as defined by what a major low so let's
go back and see where that came from
they came from there but actually goes
people back before that actually goes
all the way back to here into here
so again you see 12 can see these levels
marketing back to it again
34 comes off of it
now this is what will often happen so
the market now this
the other point of the central principle
of three is that it works best when they
are close together
why because that stays in the memory of
traders so that's pretty much the point
people are looking at it and saying
within a short period of time relatively
short period of time where you can see
it on the charts all right there in the
chart and you see it you don't have to
scroll back and look back a year or two
then it's right in people's awareness
and that's why it works that principle
of three does not work as well if it's
over a long period of time like this
this is 2016 and we have to go all the
way back here to going back over a year
so we're going back about a year so
therefore it's not as readily available
now with some people say it
absolutely they will and for that reason
people did respond to it so the market
came down
123
try to three times and then made a big
move up because people gave up on
shorting the market here they thought
okay well the market thinks it's worth
more than that market mean meaning the
market participants globally and so yeah
it went up quite a bit but then boom and
this time it just slid right through now
there's one little bar there that shows
that the market did acknowledge that
support level and that is this one right
here at a very neutral bar I just call
that a bar of hesitation so it didn't
bounce up off of the level it's not a
bullish parts and a bearish bar it's
just that the market participants are
again are like oh we know we're into
this well-known support level and so for
one day the market hesitates now
remember support resistance levels are
broken all the time they don't hold
every single time if they did well the
market would never be able to go
anywhere right so of course support
resistance is broken but this is these
are areas where we look to potentially
buy potentially sell potentially take
profits into and you need to obviously
use other things along with support
resistance you can't use just support
resistance alone
it's one of the four energies of my five
energy methodologies to actually step 4
of 5 that we look at in my very
rule-based objective training
methodology
ok let's look at one more example here
so i switched over to a different market
now and just to show that this works on
all markets and works on all time frames
as well but so this one here we've got a
high-protein here significant hi
significant low and the market goes
right back to that high now this time it
breaks through support all right now so
break through those kind of choppy a
little bit where they come back to that
comes back to resistant so this is again
that very basic concept that is called
making my arrow here so this would be
support at this point potential support
and support becomes resistant so once
the market breaks through a support line
it goes blue it then if the market
retest that it becomes resistance again
very basic concept and technical
analysis one of the the few basic
traditional concepts that I find
actually continues to work today lot of
the traditional stuff i don't mind works
anymore it's interesting i get a lot of
people posting on youtube saying you
know I'm doing it wrong
that's right i'm doing it wrong based on
the classical technical analysis because
i don't believe classical technical
analysis by and large works very well
anymore into these markets markets have
changed dramatically now that we have
flash trading high-frequency trading got
algo trading we've got your commissions
are low everybody's got direct access to
the market has changed the way the
charts move the way the chart patterns
are created and so a lot of the classic
stuff
yeah doesn't work anymore so that's
right I'm heterodox I don't hold the
line doesn't mean I don't know what I'm
doing it means i reject the old
classical style so this is part of one
of the few things in traditional
technical analysis of mine does still
work
so anyway then we come back down here
and put in a low retrace back up where
we find are supported hold support here
goes back up where to go to next again
that support that becomes resistance and
so you can see the market really does
just responding these i would say are
the most important support resistance
levels of all so if you're wondering
with forex trading whether it's for
beginners or even stock trading emini
futures commodities whatever your
trading to mean these types of levels
are the most important support
resistance levels that there are so
definitely have the minor charts watch
these levels in conjunction with other
things including cycles are very
important by the way people often ask
how do I know if the markets going to
hold support here or break through it
great question very important question
number one is is it time for the market
to put in a low ese culo and number two
is this market moving down with
tremendous strength or momentum and so
if you're interested my cycle indicator
be happy to share that with you to send
me an email to bury a top dog training
calm and
be happy to share that with you
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