# Support and Resistance Do NOT Work Without This ONE RULE

https://www.youtube.com/watch?v=Ae72G3lJdwA

[00:00] Most traders draw support and resistance levels correctly, but they still lose because they enter too early.
[00:05] So, in this video, I'm going to show you one simple rule that I use before trading any support and resistance level.
[00:11] So, by the end of this video, you can take this one rule and literally craft your own strategy to trade support and resistance.
[00:18] So, my name is Justin Bennett, full-time trader and founder of Daily Price Action.
[00:21] As always, all of this is my opinion only and not financial advice.
[00:23] So, in this video, we're going to break this up into a few different sections.
[00:27] So, we're going to talk about what support and resistance levels are, that one rule that I use before trading away from any level, and then we're also going to get into three examples.
[00:36] So, I'm going to show you a couple of short examples and one long example.
[00:39] So, the very first thing I do want to talk about here is what support and resistance levels are.
[00:43] So, before we can understand how to not only confirm the levels, but also potentially use them as a complete trading strategy where we are buying support and selling resistance, we have to really understand what these levels are.
[00:55] So here on gold, you can see where we have this level here off of these lows.
[00:57] So back here,
[01:01] you can see these lows through here.
[01:03] We have the market testing it in this area.
[01:05] This is the daily time frame.
[01:07] You can see where we did wick below here.
[01:09] However, the market held above it.
[01:10] And the close is what is key.
[01:12] Okay, that's very important.
[01:14] The close is what's key here on the daily.
[01:16] We closed above.
[01:18] Therefore, this level is still serving as support.
[01:20] And another example here too, if we come over uh to this area,
[01:22] you can see that even levels like this back here.
[01:24] So, what you'll notice is that off of these highs right back here,
[01:26] we have the market essentially finding resistance right here, coming back to the level, finding support.
[01:32] Okay?
[01:34] So, support and resistance levels are simply areas in the market, and I want to really highlight that word areas.
[01:38] Okay?
[01:40] Because they're rarely specific levels.
[01:42] So, they're areas in the market where buyers and sellers have defended that level previously.
[01:45] Okay?
[01:48] So, a support level is in this case here, you can see where this was resistance back here, right?
[01:52] Right?
[01:53] We had sellers coming into the market here and then this was support where buyers were defending it.
[01:57] Now in the case of a resistance level, it's the exact opposite where you have a
[02:02] Once support level here serving as resistance.
[02:04] Okay?
[02:06] And this really highlights too this price action through here also really highlights what I mean by these are areas and not exact levels.
[02:12] Okay?
[02:15] So simple enough. Now where most traders go wrong though is they think of a support and resistance levels as an area to buy or sell.
[02:19] And while that is technically true, a support and resistance level, all they are are just areas to start looking for a buy or sell.
[02:29] They are not the level where you want to buy or sell.
[02:32] And that's where most traders go wrong.
[02:34] It's why most traders lose because they are entering too early.
[02:36] So, as an example here, if we go into a 1 hour time frame, okay, what you'll notice is that this here is that same level on the daily that looks relatively clean.
[02:45] But what you'll notice is that gold spent days going sideways.
[02:50] And not only that, we also had this over here, this liquidity sweep before we finally got the sell-off.
[02:53] So, I'm going to show you how to avoid all of this right here, even this over here, okay?
[03:00] By not only confirming that this level
[03:02] is likely to hold, but then also formulating a trading strategy around this.
[03:08] So, even though this video is very very simple, uh again, as I said before, you could actually formulate an entire trading strategy around this one simple rule.
[03:16] Okay. So we know that support and resistance levels are simply areas where buyers and sellers are likely to step in because they have previously.
[03:22] Okay. So in other words, they are self-fulfilling.
[03:25] If enough people are watching one level on the chart, then it's likely to serve as support and resistance going forward.
[03:30] Okay. Now let's talk about the next concept here in this video.
[03:34] So that's part one. Part two is to talk about um that one rule that I look for before trading away from any level.
[03:40] Then we'll get into those three examples.
[03:42] So the the examples, by the way, are going to be gold, Bitcoin, and also the DXY, the US dollar index.
[03:46] So let's come up here to a blank space.
[03:48] I want to show you guys this who are maybe not familiar with SMC, that's smart money concepts.
[03:54] So I want to talk about a change of character because the change of character is what is going to literally, no pun intended, change the game for you when you are trading support and resistance levels.
[03:55] So a
[04:02] change of character, we have to understand what a change of character is and also a break of structure because the two work together.
[04:10] Okay.
[04:10] So in the case of a downtrend like this, we know we have lower highs and lower lows.
[04:14] So in this case here, what we would be looking for is you have the market giving you closes below these lows.
[04:21] Now what's important about this is like I said before, the close is what matters.
[04:25] Okay?
[04:25] If we wick below these, then that does not matter.
[04:28] And this applies to whatever time frame you're viewing at the time.
[04:31] Okay?
[04:31] So in this case here, you can see that we have a breakup structure or BOS to the downside.
[04:37] And again, this tells us that sellers remain in control.
[04:39] Now, the one rule that I look for when trading support and resistance is going to be a change of character.
[04:46] So, what is that?
[04:46] That's when you have in this case here, okay, we have the last BOS over here.
[04:50] That means that this level right up here is going to be what's called a protected high.
[04:57] And this is protected because essentially this is the high now.
[04:59] Okay?
[04:59] Once you have this BOS, this is the high
[05:04] that sellers have to defend.
[05:07] Okay?
[05:07] So in this downtrend, in the context of this downtrend, if sellers were to give up this level and we see the market close back above here, then this right here could be a shift in momentum, okay?
[05:17] Or a change of character.
[05:19] So what you're looking for is the market to from this low down here, come up here and take out this high up here.
[05:26] Now, what's important is that notice how I didn't say that we're taking out this high.
[05:30] And the reason for that is because there's no new BOS over here.
[05:32] Okay?
[05:32] We didn't take out this low back here.
[05:34] Therefore, this is still our protected high.
[05:36] So, this right here would be a change of character.
[05:38] Okay?
[05:40] And this is the one rule that I use when trading away from any uh support or resistance level.
[05:46] Okay?
[05:48] So, this right here, guys, is it.
[05:51] Now, this seems very simple on the surface.
[05:53] However, traders will often still get this wrong because they try to front run it, right?
[05:57] That FOMO kicks in and when you have a market going sideways for days like we saw on gold.
[06:01] Okay?
[06:03] Okay, so if we come back here,
[06:05] this right here on the 15-minute time frame, notice how long this took.
[06:09] this was multiple days of sideways action.
[06:12] So, when we draw a simple chart like that with some lines, it looks very clean.
[06:15] It looks very simple, obvious.
[06:17] But then when you see this chart, you go, okay, well, how do we apply it to this?
[06:20] So, let's get into our example, right?
[06:22] Our first example here on gold using the concepts we just talked about.
[06:26] We know what support and resistance are.
[06:27] We now know what a change of character is.
[06:29] So the first thing to understand here is that we or I at least drop down to often times a 15-minute time frame to confirm the level is likely to hold.
[06:39] Now you could use a 1 hour time frame.
[06:41] Uh the trade-off there is that a 1 hour is going to move a little bit slower in terms of that BOS and change of character.
[06:46] So you might get a little bit later of an entry.
[06:47] Um if that suits your your style of trading and your personality, then use that.
[06:51] Uh for me, I often will use the 15-minute chart.
[06:54] Now, here's what's key, and this is incredibly important is that we're not looking for a shift in momentum or a change of character until we get up here
[07:06] because remember this is our key level.
[07:08] Okay, so once we have gold dropping below, let's just recap.
[07:11] Once we have gold dropping below here, okay, so this was a support level.
[07:16] And by the way, this level in particular is actually a yearly open.
[07:18] So, a little bonus tip for you.
[07:19] If you're a few months into the year, what you can often do is the chart that you use, the market that you like to trade, go and mark out the yearly open for that chart.
[07:29] Okay?
[07:32] So, uh whether it be January 1st or 2nd, somewhere around that time frame, mark out a level there and see if it's been being held as support or resistance on the higher time frames because often times it will like in this case here with gold.
[07:43] So again, this was the yearly open for gold here and this is why the market was serving as support or why it was serving as support back here and then once we got the close below it becomes resistance.
[07:50] Okay, so going back here to a 15-minute time frame.
[07:55] So what's what's key here is that again this was the breakdown that we just saw on the daily chart.
[08:00] Okay, so we're not looking for a change of character to confirm anything over here.
[08:04] We're not
[08:08] looking for it over over here in this area.
[08:09] We're only looking for it once the market comes up here and tests this level.
[08:12] Okay, so this goes back to what I said earlier about these levels being just the start of where we're looking for that signal to in this case short.
[08:15] Okay, so it's not the area, it's not the level to short a market, it's the area to start watching for a short.
[08:17] Okay, so that is critically important uh for this style of trading.
[08:22] Now, before we go on to if you do want to see exactly how I trade SMC full-time, if you want the full strategy, then check out the link right here on the screen.
[08:24] That is a completely free training that will show you exactly how I trade SMC full-time.
[08:26] And that works in any market.
[08:28] Okay?
[08:30] It works in crypto, works in commodities, works in indices, it works in forex.
[08:32] No matter what you're trading, if the market is liquid enough, this strategy will work.
[08:34] Now, if you don't see it here on the screen, then check out the link in the description for that free trading.
[08:36] Okay.
[08:38] So, on the 15-minute chart, we're looking for this shift in momentum or change of character once the market taps into this level.
[08:39] Now, once again, kind of highlighting the fact that most traders when they see a level
[09:09] like that, they'll come out here and look at this here and FOMO kicks in and they'll say, "Man, I don't want to miss out on this.
[09:13] What if the market just tests this and then does this, okay?
[09:17] And FOMO kicks in and they go and just blindly short through here.
[09:21] Now, for those who weren't stopped out on this, they were certainly stopped out on this.
[09:24] And furthermore, too, again, this was days of price action.
[09:27] So, a lot of the traders, even if you weren't stopped out on this right here, after going sideways for days, right, that wears on you.
[09:33] And so you probably exited this trade and that would have been a mistake.
[09:35] So what we're going to do here is go back to this price action right back here.
[09:39] Okay.
[09:41] So we're going to play this forward as if this is a live market.
[09:44] It's live conditions here for gold.
[09:46] And all we're going to do is what I call walk it forward.
[09:49] And and what that means is all we're doing is identifying a breakup structure, okay, or change of character.
[09:55] Now, in this case here too, and I've I've made videos on this before, um, this pullback right here relative to the displacement candle.
[10:02] So, this pullback over here was too shallow for me to call this over here a BOS.
[10:07] Now, even if you
[10:10] had done that though, this pullback right here was pretty nice.
[10:14] And so, what you would have done is you would have said this right here is your BOS.
[10:15] Okay?
[10:18] So, if this is your breakup structure, then this down here is your protected low.
[10:23] Now again, I would not have necessarily done that because this displacement candle was far too aggressive.
[10:28] This this pullback here was not shall or not deep enough for me to call that a protected low.
[10:33] Um, but for purposes of this example, that wouldn't even matter because what you can see here is that we then had the market taken out this high over here.
[10:41] And again, this pullback right here was actually really nice because we had this internal liquidity that built below the lows.
[10:47] We then swept that down here.
[10:49] So this BOS is really nice.
[10:51] Okay.
[10:54] So, as the moment that we have this, what we can do is we can call this level over here our protected low.
[10:58] Okay.
[11:02] So, if we then turn on the magnet tool here, snap it right to this low and drag this over.
[11:06] Now, I'm going to drag this way over because we know that this takes days to play out.
[11:09] Okay.
[11:10] So, we're going to drag
[11:11] this way over here.
[11:14] Now, here is the key.
[11:16] And again, this goes back to having patience, guys.
[11:17] You got to be able to have patience to wait for this to play out.
[11:19] And those who did not again would have probably taken a loss here on this, okay?
[11:24] Because you can see we got the move up there once again.
[11:27] Now, here's where we go back to the shallowess of this pullback.
[11:29] Okay?
[11:31] This right here, guys, is not enough.
[11:33] This right here is my low I want to see taken out.
[11:35] And the reason for this just goes back to we still have inefficiencies down here.
[11:39] Okay?
[11:42] And this pullback right here is just too shallow once again.
[11:44] Okay?
[11:46] And also the fact that I know that this level, okay, this low right here is right off of that level that we're trading.
[11:53] So, for me to have conviction in the fact that this level up here is going to hold and I'm looking for shorts, I need to see the market give me a breakdown of this low down here, not just a break of the level that we're watching.
[12:03] Okay?
[12:05] I need to see something very convincing where we come back here and take out lows like this here after forming these higher highs.
[12:09] Okay?
[12:11] hopefully that's clear enough.
[12:13] Whenever you're looking for a change of character, it should feel a little late.
[12:16] Okay, it should feel late.
[12:17] That's the entire point of it because the change of character is also not the short.
[12:21] I'll show you here in a minute what is.
[12:23] Okay, so let's play this forward now.
[12:24] I'm going to play this forward while we're talking about this.
[12:27] Um, you can see the market is just kind of bouncing around our key level here.
[12:30] And again, this is where patience comes in because anybody who was trying to short this through here probably got taken out on this.
[12:36] Okay, now here is our change of character.
[12:38] Now to recap, okay, we have our key level in place.
[12:42] We also know that the market has been testing it out for days.
[12:45] And we also know that this over here is the low that we want to see taken out.
[12:50] And by the way, guys, this is not after the fact stuff because I literally uh called this out here in Discord.
[12:57] So this is where, you know, VIP members hang out.
[12:59] I hang out with them.
[13:01] Uh I post trade setups every day.
[13:03] I share my trades in real time.
[13:04] All of that.
[13:06] This was that exact setup right here.
[13:08] Okay.
[13:08] So, this was the change of character right here.
[13:10] And I pointed to that key level here, uh, that we're
[13:12] looking at right now.
[13:14] And what you can see is the result was a test nearly right off of that level.
[13:17] Okay?
[13:19] So, we do talk about this stuff in real time.
[13:20] This isn't just a video I'm making after the fact to look good.
[13:22] And this was the test right here.
[13:23] Okay?
[13:25] So, we had the change of character.
[13:27] We had that shift in momentum.
[13:28] And then you can see we tapped right back into this level.
[13:30] Now, remember, this is our level that we're watching.
[13:31] This is our resistance level here.
[13:33] Um, but we're waiting for this change of character, okay, for the market to give us that shift to tell us that the momentum has gone from buyers in control to now sellers in control.
[13:37] So once you get the change of character, you're looking for a lower high to develop.
[13:48] In this case, we did have a pretty um aggressive drop here, okay?
[13:53] A lot of displacement here on this candle right here.
[13:54] So a move back into this was likely.
[13:57] Okay, and again, you're looking for that lower high to develop.
[14:00] So, this goes back to not only can you use this one rule, this change of character to help confirm a level, but you can also use it to craft a trading strategy to then, you know, basically in this case short the level.
[14:09] Okay, so again, you can see the retest here.
[14:11] Once again, this
[14:13] right here is your short.
[14:16] Okay, this is your short following this following the close below that low, giving us that shift in momentum.
[14:20] So, we're confirming that the level is likely to hold as resistance.
[14:24] We are also then potentially even shorting the market on this move right here.
[14:29] And if we go back to an hourly time frame, you can see where that would have been a great move to short against that level uh just because the market did sell off aggressively after that.
[14:38] Okay, so really clean stuff right there from gold.
[14:40] So you can see how we have the level in place.
[14:42] We then drop to a 15-minute time frame and use that change of character to not only confirm that this resistance level, okay, let's go back to a daily time frame.
[14:50] that this resistance level up here was likely to hold but then to also enter short on the retest here.
[14:55] Okay, so really really powerful stuff and this also helped us to avoid from entering into this early because like I said, you know, if you had just blindly shorted this level when it was retested when it was first retested back here, you probably would have been stopped out.
[15:08] Okay, so this right here helps you avoid all of the chop and also gives you an
[15:16] incredible entry.
[15:18] Okay, and also a lot of conviction in this.
[15:19] This right here gives you more conviction in shorting this level.
[15:23] Okay, so let's go over here to Bitcoin BTC.
[15:26] Now, this is a weekly time frame and this is another level that I also pointed out in Discord.
[15:31] So, if we go over here to Discord, you can see that this is it right here.
[15:34] This is the same level, okay, with a couple channels marked up as well that are valid on the on the lower time frame.
[15:39] So, don't don't pay attention to them here on the higher time frames, but you can see here that this is that same exact level on the weekly.
[15:46] Okay. So again, this is stuff that I talk about in real time.
[15:49] This isn't hindsight stuff.
[15:51] And what you'll notice here is that in this case with BTC, very similar to gold.
[15:54] This was an area.
[15:56] It was an area back here.
[15:58] You can see support back here.
[16:00] We closed below.
[16:02] It became resistance.
[16:04] Now again, very similar to gold.
[16:06] We had the market actually treating this as an area, not a specific level and wicking above here.
[16:09] So this doesn't look like much, but remember this is a weekly time frame.
[16:13] So, anybody trying to short this, this move right here from Bitcoin was actually Okay, so
[16:17] from this level down here up here to the high of this candle was about $1,500 or over 2%.
[16:24] Okay, so you probably would have been stopped out if you were trying to just blindly short right from this level.
[16:29] Okay, so here comes that one rule that we use, right?
[16:31] So, looking back here at the 15-minute chart now, similar to what we talked about on gold, we're not looking for the change of character over here.
[16:39] We're not looking for it over here.
[16:41] We're starting to look for it here.
[16:42] Okay, so we're starting to look for shorts up here in this area knowing that that is a weekly level.
[16:46] Okay, a key weekly level that we've seen Bitcoin close below.
[16:49] Therefore, it is now resistance.
[16:50] So, this also this rule also helped us stay out of any shorts through here because again, what would happen is you would see traders come out and this is where traders get it wrong.
[17:01] You can get the level exactly right, but if you're not doing this one thing, you're entering too early and you're most likely taking loss after loss.
[17:07] And the result is that you start to think that support and resistance don't work.
[17:11] But they do work.
[17:13] You just have to wait for the confirmation.
[17:15] You have to have the patience.
[17:16] And you also have to know this
[17:18] one rule because it's incredibly powerful.
[17:20] So anybody shorting through here, you know, if you weren't stopped out on this, then you were probably stopped out on this.
[17:26] So again, a $1,500 rally from the level.
[17:29] So how do we avoid this?
[17:32] Well, looking at this here, let's take this wick over in this area.
[17:34] off of this wick.
[17:36] You can see where we did sort of close above it here.
[17:38] We're going to call this a BOS just for example purposes because really it doesn't matter the external low or the the protected low in this case which by the way you find that by taking this right here boxing this out.
[17:50] What's the lowest point from this over here to this over here?
[17:53] It's obviously this low.
[17:55] Okay.
[17:55] So that is going to be our protected low.
[17:58] So knowing that what we can do is we can draw a level right off of this and we can say okay well this is the level now that sellers have to take out.
[18:05] If we had seen this over here now now granted this was very close okay this was very close to this high.
[18:10] Um but if the market had done this you know close up here and then close below here then we would have that change of character and then we're
[18:18] looking for shorts on that lower high.
[18:21] But in this case what you'll notice is that we never did that.
[18:22] Okay we never did that before rallying.
[18:24] So this was your cue to just stand aside.
[18:26] Okay, so let's walk this up now.
[18:29] What do we have here?
[18:30] We have a really nice, you know, pretty deep pullback here.
[18:33] Okay, pretty aggressive pullback on this runup.
[18:35] So this is perfect because what we can do is we can say, okay, well this is our high up here where we had the BOS and in which case we know that this low down here is the protected low.
[18:37] And if we move this over, you can see where we did close below.
[18:39] Okay, so that right there is our change of character.
[18:42] So, we can get rid of this over here because we now have this shift in momentum.
[18:44] Now, in this case here, right, you're looking for a lower high.
[18:47] What do we have right here?
[18:51] Now, I've made videos on this before as well, but off of this high down here to this low, what you'll notice is that the market actually tapped right into OT.
[18:53] Okay, right here.
[18:55] Okay.
[18:57] Now, you could even draw it off of this low down here.
[19:00] In either case, it's technically right.
[19:01] In either case, it doesn't really matter
[19:19] because we're up here in this area.
[19:21] So, this is the lower high where you're looking to short.
[19:24] Now, you could also just short through here.
[19:26] You could short through here with a stop loss above the high.
[19:27] Okay?
[19:29] But if you're looking for a more granular entry, a better riskreward, then this lower high is really ideally what you're looking for.
[19:34] Okay?
[19:36] And again, you can do the same exact thing over here, right?
[19:38] You can look for a BOS, okay?
[19:42] A BOS over here, and then a change of character over here if you really want it to get granular.
[19:44] And then you're entering through here potentially even, you know, in a more aggressive stop above the high.
[19:47] Okay?
[19:49] But the point here, guys, is that we are sidest stepping.
[19:52] We are sidest stepping all of this price action, this entire runup, which was nothing more than a liquidity sweep and a trap for buyers.
[20:01] So, if we're shorting this market, we are not shorting against the exact level.
[20:05] We're not blindly shorting through here and hoping for the best.
[20:08] That is what most traders do.
[20:10] It's why most traders lose when they try to use support and resistance.
[20:14] And again, the end result is they think support and resistance levels don't work, right?
[20:17] It's just a bunch of hocus pocus that doesn't work.
[20:19] They do work.
[20:20] Again, you
[20:20] need this confirmation. So up here we
[20:23] have the BOS change of character. Now
[20:25] again you could enter a short through
[20:26] here. You could wait for that lower high
[20:27] for a better riskreward. In either case,
[20:30] your stop loss would go above the high.
[20:31] Now I don't want this to turn into a
[20:32] complete strategy video. That's not what
[20:34] this is about. It is about confirming
[20:36] that a level is likely to hold using
[20:37] those lower time frames. And then like I
[20:39] said though, you can see you can easily
[20:41] see how you could take this and turn it
[20:43] into a trading strategy for yourself.
[20:45] Now a couple of things here before we go
[20:47] on to our DXY example. And and by the
[20:49] way too, this would have played out
[20:50] nicely as well. Okay. So, if we move
[20:52] over here, you can see where this was
[20:54] that shift that we're talking about up
[20:56] here. And then you can see the result.
[20:58] Okay. So, again, this would have played
[21:00] out really nicely here. This was, you
[21:01] know, I believe like a $4 or $5,000 drop
[21:03] uh from that level. Okay. Now, before we
[21:05] go on to our DXY example, which is
[21:07] actually a long setup, um I do want to
[21:09] say too that this works best in a
[21:12] trending market when you are with the
[21:13] trend. Now, this might seem like we are
[21:15] shorting against this uptrend here.
[21:17] However, keep in mind that this right
[21:19] here is corrective. its relief within a
[21:22] larger downtrend. So if we go out to
[21:24] something like a 4-hour time frame or
[21:25] even a daily time frame, you can see
[21:26] where this has been, you know, now
[21:28] months of a downtrend, lower highs and
[21:29] lower lows. So we're not necessarily
[21:31] trading against the trend because we
[21:33] know the overall trend is lower. All
[21:35] we're doing is looking for relief into a
[21:37] key level, dropping to a lower time
[21:38] frame to confirm that that level is
[21:40] likely to hold. Okay? And again, you
[21:42] could turn this into a trading strategy
[21:43] where you're looking for shorts on that
[21:44] lower time frame change of character. So
[21:47] the DXY, let's talk about this one here
[21:48] again with the trend. Okay, what you'll
[21:50] notice here is that we have the low down
[21:52] here. We have a higher low that
[21:54] developed over here. Okay, so we took
[21:57] out some highs back over here. So we
[21:59] have the market now shifting into an
[22:00] uptrend. Okay, so you can also see too
[22:03] that if we get a little bit more
[22:04] granular 4hour time frame, you can see
[22:06] where we did actually take out this high
[22:07] right back here as well. Okay, so we
[22:09] took this out. So the level I want to
[22:11] talk about right here is going to be off
[22:13] of these highs. Now, this is clearly a
[22:15] key level in the market, right? No doubt
[22:16] about that. Nobody can really argue
[22:17] this. Um, however, this goes back to
[22:20] Okay, in fact, we're going to go and
[22:22] play this forward just like we did with
[22:24] gold. So, coming back here toward this
[22:26] area. So, just like the other markets
[22:28] too, if you were looking for buys
[22:30] through here, what most traders will do,
[22:31] and this is the DXY, okay? So, this is
[22:33] the dollar index, but you can use this
[22:35] as a proxy for, you know, euro, pound,
[22:39] Australian dollar, all the majors to
[22:41] look for dollar strength because again,
[22:43] we're looking for a bounce here from
[22:45] this key level. But where most traders
[22:46] go wrong is they are looking to blindly
[22:49] buy the US dollar as soon as we get a
[22:51] test. Now you can see here that we
[22:53] actually gap down. Okay, we gap down and
[22:55] we technically test this level. So
[22:57] again, this is where a lot of traders
[22:58] would go out there and just say, "Okay,
[23:00] we're testing the level. I'm just going
[23:01] to buy the dollar without waiting for
[23:04] confirmation." And oftent times because
[23:06] these are areas, what do you get? Right?
[23:08] And markets seek liquidity. There was
[23:10] liquidity that built up below the lows
[23:11] down here. So what do you do in this
[23:13] case? You wait for confirmation. just
[23:15] like everything else. So using SMC,
[23:18] using a break of structure, change of
[23:20] character, all we do is off of this low
[23:22] back here, we say, "Okay, this is our
[23:23] BOS, right? We closed below here. That
[23:26] means this up here is going to be the
[23:28] protected high." Okay, so very very
[23:31] simple. Same exact structure every
[23:33] single time. So we have our key level
[23:35] identified. We wait for the market to
[23:37] tap into it. That is not the buy. This
[23:39] right here is not the buy. Okay? This is
[23:41] just the area where we're waiting to
[23:43] start looking for a buy. Okay. So,
[23:45] playing this for now for the DXY, for
[23:48] the US dollar index. So, we go sideways
[23:50] here. And again, this is where if you
[23:52] had bought, you know, right here, even
[23:54] if even if this didn't stop you out,
[23:56] it's very, very difficult to buy here
[23:58] and just watch the market doing this and
[24:00] even dipping back down here. Okay? So,
[24:02] this helps you sidestep all of this
[24:04] sideways action. Okay? And right there,
[24:06] you can see where we did get the close
[24:08] above. Now, like everything else in this
[24:10] video, the two other examples we looked
[24:11] at, this was also something I mentioned
[24:13] in Discord as well for members. So,
[24:14] right here, this was the post and these
[24:17] were the charts. So, there's our key
[24:18] level. You can see the BOS here mapped
[24:20] out with SMC terms. And then this was
[24:22] the 15-minute chart, exactly what I'm
[24:24] showing you right now. So, I told
[24:25] members that this level up here was the
[24:27] one. If we take this out, then we have a
[24:29] potentially confirmed bottom for the
[24:31] DXY. So, this is that move, right?
[24:34] 50-minute time frame, we have the change
[24:36] of character. So this is that
[24:38] confirmation now that this area down
[24:41] here is likely to hold. Now it doesn't
[24:43] mean that we just go like this, okay,
[24:45] and move higher because we can still see
[24:47] the market go sideways here for a bit
[24:48] and we have some inefficiencies back
[24:51] here as well. Okay, so if you're looking
[24:53] for that better riskreward, then like
[24:56] the other stuff we've talked about,
[24:57] you're looking for in this case a higher
[24:59] low to develop following that change of
[25:01] character. Okay, so right here you can
[25:03] see we pull back and this at this point
[25:05] guys, this is where most traders would
[25:07] see this aggressive pullback and say
[25:09] that this back here is now off the
[25:12] table, right? Like there's no chance
[25:13] we're going to hold this level now with
[25:14] the DXY pulling back and looking so
[25:16] weak. Okay, but here's the key. You look
[25:19] at this here, this low down here, fibs
[25:21] up here to this high. Notice where we
[25:23] pulled back. We pulled back right here
[25:25] into optimal trade entry. I've made
[25:27] videos on this before. This is the area
[25:28] between the 79 and 62% retracement where
[25:31] you often get following a change of
[25:32] character, you often get the market
[25:34] reversing from here. So once we tap into
[25:36] that, this is actually textbook. This
[25:38] was perfect where a lot of traders again
[25:39] would look at this and say, "Man, the
[25:41] dollar's going lower. This looks really
[25:42] aggressive. Sellers are in control."
[25:44] They're not. We already had the change
[25:45] of character. We're at the key level.
[25:47] And what do we get here? We get the
[25:49] market just rocketing higher. Okay? And
[25:51] it all started with one, the retest back
[25:54] here. Two, that 15-minute change of
[25:56] character. and three that higher low
[25:58] forming. Okay, so all incredibly simple
[26:00] stuff, but you can see how powerful this
[26:02] is. And again, you look back to here on
[26:04] the 4 hour time frame, right? This level
[26:06] was so precise back here, but notice
[26:08] what happened. We dropped below it.
[26:10] Okay, we dropped below it. And traders
[26:11] see this and they think, "Oh man, we're
[26:12] breaking down. The dollar's weak again."
[26:14] No, this is an area. This is not an
[26:16] exact level. We're looking at those
[26:18] lower time frames for the change of
[26:19] character to confirm it. And you can
[26:21] also see that once we confirmed it, look
[26:22] what held that support right through
[26:24] here, right? that key level held that
[26:25] support on that higher low and the end
[26:27] result was the US dollar just rocketing
[26:30] higher over the coming days. Okay, so
[26:32] again, really nice move here. If you
[26:34] were buying the dollar down here,
[26:35] obviously uh you made out like a bandit
[26:37] that week because it was an incredible
[26:39] move uh from the DXY that all originated
[26:41] from this key level combined with that
[26:44] one rule, which is waiting for a
[26:46] 15-minute change of character. So use
[26:48] this one rule just like we talked about
[26:50] here anytime you are trading support and
[26:51] resistance and you will find that your
[26:53] performance is going to improve
[26:55] immensely. So I truly hope this video
[26:57] has helped. If it has, then be sure to
[26:58] check out that free SMC training right
[27:00] here on the screen that's going to show
[27:01] you exactly how I trade SMC full-time. I
[27:04] hold nothing back. It's the complete
[27:05] strategy step by step. So until next
[27:08] time, trade well out there and I will
[27:09] talk to you again in the next