Support and Resistance Part 3


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Support and Resistance Part 3
[00:13] – Welcome to another video brought to you buy This video is part of our Forex Trading Training Series. This is Video Number 11, Support and Resistance Part 3.
[00:26] – In our previous two videos, I have taught about Support and Resistance, and I have given you some examples of how powerful support and resistance can be, when combined with specific Japanese Candlesticks, such as Engulfing Candles and Pin Bars. Support and Resistance Part 1, I taught Horizontal Support and Resistance; in Support and Resistance Part 2, I taught about Dynamic Support and Resistance.
And in this video, I will teach about Channel Support and Resistance. Hopefully by now, you will be starting to see how powerful these concepts are that I have taught so far: Price behavior, Japanese Candlesticks and Support and Resistance. When we combine these three, we can see specific signals in the markets to go long or go short and profits from financial market. As this course continues to progress, I will show you further ways to profit from financial market.
And in Video 14, I will start teaching you some trading technique and start setups by combing everything that has been told so far.
[01:53] – Channel Support and Resistance is when price moves repeatedly between a support and resistance area. And I will demonstrate this new graph very soon. Channel Support and Resistance is common with both trending and ranging markets, and just like Horizontal Support and Resistance and Dynamic Support and Resistance, it is a powerful concept in financial markets that can help us to profits.
Instead of giving you illustration in this video about Channel Support and Resistance, I will like to go straight to graph as I feel that is the best way for you to learn about Channel Support and Resistance.
[02:37] – This is the Pound against the US Dollar and it’s a four hour chart. As mentioned, Channel Support and Resistance is when price moves repeatedly between Support and Resistance area with financial markets or the forex markets. Since we have a resistance and a support, price could move between these two, and we effectively have a channel between the resistance and support area.
The price data on the chart shows price ranging, price is moving in a clear sideways direction on this four hour chart. If we mark the resistance, and the support, you can clearly see that price is moving in a sideways direction, but is also moving in channel. And this is Channel Support and Resistance.
But what I find more fascinating about Channel Support and Resistance is that price can be within a channel when price is trending. And let me demonstrate this.
[04:07] – We are sticking with the four hour chart. We have a clear uptrend and then a clear downtrend. On this uptrend we have a Push; a pullback; a Push; a pullback; another Push; a pullback; push; pullback; push. And there is uptrend, we have higher highs and higher lows and then price downtrends.
In order to identify Channel Support and Resistance, we connect the previous two lows or the previous two highs. Let us see a trend line and let’s connect this Slow with this low. Let’s make the line nice and long. So all lows are now connected. You will notice by connecting by this low and the second low, we have created a Channel Support Line.
Our third low is on the support, and so is our fourth low. In fact if we identified this first low and this second low, we could have potentially profited from the rest of this trend as price came back to this channel support. As with horizontal Support and Resistance and Dynamic Support and Resistance, we wait for the price to reach the Support and Resistance and then we go look for Engulfing candles and Pin Bars. As price comes back and touches the support, we have a nice Bullish Engulfing Candle. The fourth time the price pulls back to this channel support, we have another Bullish Engulfing Candle and price goes to the upside just as here.
If we duplicate our channel supports, we also can make a channel resistance. If we move our channel resistance to touch our previous highs, we have created a channel. And even now we have a minor breakout, price moves nicely within this channel. So why it is importance to make the resistance of this channel as far as this support where we could this resistance as a potential area to close the position. So if we opened on this Bullish candle on the support, we could have closed someone up here.
[07:15] – Let us look at this downtrend. We have a clear Push; a pullback; a push; a pullback; a major push; a pullback; and a push. If we mark the two highs of these pushes and pullbacks, once again we have a channel resistance. Price pulls back to this resistance, we have a Bearish Engulfing and price moves heavily on the downside. Now all markings from Pushes and Pullbacks are not going to create Channel Support and Resistance. We could mark these two highs, the first two highs of this trend and you will notice it doesn’t act a resistance. The key is just a mark highs and lows of a trend and see how price behaves.
We go now see the resistance on a downtrend. To identify Channel Support and Resistance, we could mark these two lows. Like so, price reaches this channel supports and bounces. And it is as easy as that Channel Support and Resistance as while as Horizontal Support and Resistance and Dynamic Support and Resistance is very powerful and is fundamental for any trader seeking to trade with technical analysis.
[09:17] – Channel Support and Resistance can be formed on trending and ranging environments. Channel Support and Resistance can be identified by joining previous highs and previous lows. Our next video is Support and Resistance Part 4, which is the last vide on this Support and Resistance miniseries.
As always, please check out our website, and please watch more videos.

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Jonathan Millet is currently the proud CEO of, the brand new financial news portal which is making waves among Forex traders around the globe for the innumerable Forex resources it offers. He also holds the position of Binary Options Consultant at Before was around, Jonathan was a successful Forex dealer and chief market analyst at Forexyard. He has also worked as a Forex trader. His other specialties include advising financial companies of how to stay head of the competition.