This set-up is a bit more aggressive, it is harder to spot but it can be very profitable when traded.
Step 1: Find a Resistance\Support level
It should be a level that price has touched before and reversed:
Step 2: Make sure the Moving Average is Flat
The 20-period Moving Average must be flat for the set-up to be confirmed. (the middle band of Bollinger)
The second set-up we are going to teach you is the TrendLine Pullback formation. The TrendLine pullback formation occurs when price breaks a trend line, and then retraces to test it. Once price tests it, and reverses – we will enter the trade in the direction of the breakout.
Step 1: Identifying a trend line
We identify a trend line – price stopping on one line for more than 2 times.
Dynamic SR System
The first trading set-up we are going to show you is the Dynamic SR set-up.
As the name suggests the basis for this system is dynamic support\resistance level which price has struggle to break. When price touches this level we will wait for signs that price is reversing- and will enter the trade.
The dynamic SR level will be the Moving Average level. Preferably the 20- period Moving Average, though you can use any other period.
Step 1: Waiting for the MA to become sloped.
We wait for the MA to become sloped. This is a sign that the trend is strong. A sloped moving average means that the trend is strong and therefore any retracement to the MA will probably lead to a continuation in price, and a good trading signal for us to trade.