¿How to properly spot S/R?

Hmmm. Very interesting. This is what I found

 

Thanks for the guidance, I found a congestion + breakout +test setup on April 2019. The market topped in January just below the bottom of that congestion and today we stopped at the level where price confirmed the test of the breakout in nov-dec.

 

Hi Paaddict, I trade something close to supply and demand but understanding why price stops where it does has a lot to do with reading what the bars are doing.

 

How this leg even developed and where you could have entered based on the previous pullbacks

 

When price falls through a level (gray levels on chart) the best action is to place a short at the level if fell from - taking a long to resist/supply/sell orders is a huge risk. I hope this helps and not muddy the water further

 

Thanks, what I understand from this is that potential resistance is defined at a level where supply showed itself in the past i.e a Lower High that developed into a trend. So when prices return to that area one gets ready to go short again. Is that what you were trying to communicate or I got it wrong?

 

I tried this approach today, just for the sake of trying and it was very interesting. Have never done this in the past.

 

Just remember the higher time frame levels = more significance and bigger reaction. The tricky part is figuring out how far the reaction will go and where to take profits.

Your short is a scalp against the bigger test which is going on here. Today is a test of Monday's lows.

 

Thanks, I am looking at it at the moment.

 

Flip through all your time frames and see if you can figure out why the low was at 39.75.