The Simplest trading strategy ever

True frequent story: many amateur traders forget to use the simplest and still very effective strategy to trade, right after they learn more complicated things!

Complicated strategies, sophisticated indicators, complex trading signals etc... I don't argue they can be very good and profitable too, but why we forget the simplest which have confirmed over and over and is easier to learn and experience?

I am talking about Support and Resistance levels.

Supports are levels below the current price, which if price drops to them, market will face more demand (buying) that demand will impact the price (to rise, if the support is strong enough)

And every support which breaks, becomes a resistance level for next price meet.

C2nqgwQS.png

This is a sample for support/resistance lines.

As you see in the image, the blue line was a resistance level till mid-June, but now it is perfectly supporting the price above. You can spot three attempts to break this support which all failed.

More times a support or resistance show strength against price changes, more credit they gain. but it doesn't mean they become stronger (wrong belief) they just get more credit to be known as a support/resistance.
Strategy

Simply buy at a support level, take profit at the closest resistance and put a stop loss below the support.

How much below the support?

good question. it depends on your Risk to Reward ratio and wider to say, your money management rules. It is a very important issue which needs to be discussed separately, as I promised to keep this post Simple!

So I will write it in a different post soon, don't miss that :)
Thanks for reading.



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26 comments
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thank you for coming up with these two words; resistance and support, which confusing me for so long. i think now i understand how the demand and supply functions behind. great lesson!!!

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Good risk/reward ratio! Thanks ;)

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well... above 2 is good, 3 is great!
these can't be talked about so abstract...

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Hi @honarparvar

Refreshing read.
I'm not much of a trader, however when I did try to get some experience in that field I've learned to monitor price and volume action. And I always pay attention to it.

I strongly believe that regardless on our strategy it's important to understand price/volume action.

Also, why wouldn't you share this publication with others on our channel? You spent some time writing it, so let's not waste your time (lack of traffic is kind of waste, isn't it?).

ps.
I would also like to thank you for your latest supportive comment. My latest post has been downvoted by over half million SP (attack of few accounts), however I also received solid support and few strong upvotes and now I will be enjoying the biggest genuine payout in my lifetime ;)

Strong upvote on the way!

Yours
Piotr

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I believe your post was very helpful and i see you very responsible for the community of steemit in that way.
but I don't wonder why some pose against such ideas and behave like that!
hope for a better community

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Hello @honarparvar! I got a question: The blue line is the line of support and also of resistance? How do I recognize that line? Do the systems define it for you or is it just something you look at? For example, the Bitcoin, could you say that its current resistance line is about $9000? Since it has remained (thank God) above that price.

Thanks for the strategy 😊

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I think, and I am no expert... that in the above chart three times the prices went down and held good support at the blue line. You got to see the price charts, binance info has good charts and that bitstamp exchange also has tools to draw on charts.

See 1 day, 4 hr and weekly charts.

Go back to earlier time frames and see the price where there was resistence and support, and try learning it, by studying it, you would get there. Start with the 1 day chart and then study other charts, its fun actually(:

I think you buy at support and expect it to go up till its resistance and sell it off before the resistance point.

You use this with the simple moving average, the macd indicator and even rsi...its more than enough to be a sucessful trader in todays world.

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OMG! You're good at this! Teach me Obiwan Kenobi :D

Do you have any crypto in mind which I could invest a couple of dollars???

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Yes, good and simple strategy, that I am using too. One day I would love to fully understand Elliot Waves, but it will take some time to me.

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thanks for reading and the comment
i was once trying hard to understand and apply EW but it happened to me to become an ignorant to it!!

wasn't for me!

honestly I saw ppl who claim they know EW perfectly, justifying all chart acts!

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Dear @honarparvar

As I see it in my language it can be translated as max and Min bands.

Of course, they also move according to the behavior of the demands of that market. Anyone according to where it is established, but what I can understand is that they will tell me in the future that within those limits they will continue to behave ..

True?

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better to say: the probability of such behaviour is stronger
thanks for stopping by and reading my post

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Hello dear @honarparvar, very good explanation.

You learn a lot from your publications, although this about the markets and businesses is somewhat complex, at least for me, you know how to explain all this matter well.

Thanks for sharing.

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thanks Fucho 🙏🏼 i appreciate your kind comment

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Perfect advice!! ... I did not even know this you know, else would have brought BTC when it reached the bottom and just held...

I brought so many coins when it was rising, and now I should have brought when they are low. Market trading tests your patience, but I am getting there!!!

I do look through charts and try to read their support and resistance level every evening, just like people who want cricket scores, this is my crypto entertainment.

I lost a lot of money being an idiot, buying high, not able to stand price going up and selling low, damn, fear stuff. But I am through this, I wait and watch charts, read and make a move based on what price this crypto would reach based on its resistance.

I have not made any profits as yet... but I brought BTC when it cae to 9,600 levels the second time, I thought it has solid support at 10,000 level, which kind of it has, expecting a bull stuff since that's the trend so want to ride it, so HOLDING.

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hi, quite a story :) i highly recommend you to study money management skills. it helps you win in the long run. maybe i start a series about it

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Howdy dear friend @honarparvar.

Thank you for these didactic publications. Slowly you are taking us to the complicated world of graph analysis but in a way of easy understanding.

I hope one day you can talk to us about the "Chinese candles." I said well?
I have heard this term but I do not understand it.

Thanks for sharing.
Your friend, Juan.

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thanks my friend. it's japanese candles actually. they used to analyse the price of rice 5 centuries ago with these candles

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oh! etymology? I will study the origin of these terms.

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Without money, these strategies are about relevant to my life as the comic section. If the markets disappeared, it would be like missing a brand of cereal in my grocery store. None the less, I enjoy these numbers and info flying around. This strategy is the one that has always made the most sense to me. btw

Looking forward to the Risk/Reward Ratio

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