The video discusses the importance of correctly drawing support and resistance levels in trading, citing that 99% of traders do it wrong. The speaker emphasizes that finding key levels correctly can lead to a high win rate and trading opportunity.
The speaker identifies four "secret rules" for drawing support and resistance levels:
1. Multiple rejections: A level is valid if price has reversed at it multiple times.
2. Price movement: Price needs to move away from the swing low or high to confirm a level.
3. A level can be both support and resistance: Support can become resistance and vice versa.
4. Levels must be near the current price: Only draw levels that are relevant to the current price action.
The speaker also discusses how to trade using these levels, including:
* Waiting for multiple confirmations, such as reversal patterns and moving average crossovers, before entering a trade.
* Placing stop losses above or below the key level, depending on the direction of the trade.
* Setting take profits at the next key level.
The video provides examples of how to apply these rules and strategies to real-life trading scenarios, emphasizing the importance of patience and waiting for confirmations before entering a trade.
Here are the key facts from the text:
1. The video discusses how to correctly draw support and resistance levels on a chart.
2. Support and resistance levels are one of the most important things to master when trading.
3. 99% of traders are getting support and resistance levels wrong.
4. Finding key levels correctly can give traders a high win rate trade opportunity.
5. A resistance level is formed when price goes up to a certain level and then reverses downwards.
6. A common mistake traders make is drawing too many lines on their chart.
7. The purpose of drawing key levels is to make it easier to analyze and less confusing.
8. There are four secret rules for drawing support and resistance levels.
9. The first rule is multiple rejections, where price must have rejected a level multiple times before it can be considered a support or resistance level.
10. The second rule is that price needs to move away from the swing low or swing high, and then reverse and head back down.
11. The third rule is that a level can be both support and resistance, and support can become resistance and vice versa.
12. The fourth rule is that levels must be near the current price, and not too far away.
13. When trading support and resistance levels, traders should look for multiple confirmations before entering a trade.
14. One confirmation is the Evening Star Candlestick pattern, which is a reversal pattern that indicates a lot of sellers in the market.
15. Another confirmation is the moving average crossover, where the moving average goes above the candlesticks.
16. Traders should place their stop loss above the resistance level or below the support level, and give it some breathing room.
17. Traders should place their take profit at the next key level.
18. Support and resistance levels are not just one line, but an entire area.
19. Traders should focus on drawing the most recent key levels.
20. Traders should not draw key levels that are too far away from the current price.