Part Four — Application
Chapter 11 — Selling at Resistance
Resistance is any level where the price of an asset reaches, changes direction and continue to fall. Selling at resistance is the mirror of the previous chapter, and the discipline required is identical.
Illustrative example
Wait
The resistance area is marked in advance from the higher timeframe. Nothing is sold into a rising market simply because it looks high.
Confirmation
Rejection of the higher prices, a close back below the level, sellers regaining control on the lower timeframe. Confirmation is evidence, not opinion.
Reaction
The move away should be decisive. A slow grind against the level frequently precedes a break, not a reversal.
Entry concept
Entry follows the confirmed reaction with the resistance area above as the reason for the position. Advanced execution rules remain part of the premium programme.
Stop placement
Above the area. If price closes decisively beyond it, the level has failed and the trade is finished.
Profit targets
The nearest internal support first, then the external boundary below.
Risk
Same arithmetic, same fixed percentage. The direction of the trade never changes the risk rules.
Example walkthrough
H4 shows a weekly high that previously ended a rally. Price grinds back up to it during the London session. On M15, price reaches the area, prints a long upper wick and closes back below, and the following candles fail to reclaim it. Stop above the wick extreme, first target at the internal support that held the last pullback.
Key concepts
- Resistance requires observed seller response
- Confirmation prevents prediction
- Targets come from opposing levels
Practical example
Price reaches H4 resistance and closes back below on M15; only then is a sell plan considered.
Common mistake
Selling merely because price appears high.
Knowledge check
Check your understanding
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