Strong Support/Resistance Crotch Trading Strategy – (Vid. 3 of 6)

Strong Support/Resistance Crotch Trading Strategy – (Vid. 3 of 6)

Updated: Aug 23, 2022
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This article and video looks at how to analyze forex pairs using strong support and resistance levels, and then reveals the Crotch Trading Strategy which is based on those strong price levels/areas. This is the third video in the Forex Swing Trading in 20 Minutes video series.

As with all strategies, this one will take time and effort to learn and get good at. Strong support and resistance levels may seem easy to identify, but the main issue traders face is assuming that TOO MANY levels are strong. This usually stems from boredom and wanting to trade; traders assume a level is strong just so they can take a trade, even when the level is not strong and didn’t cause a significant price reversal.

I. Crotch Strategy Video

It’s important to watch the other videos in the Forex Swing Trading in 20 Minutes video series for some context on this forex swing trading strategy.

II. How the crotch strategy relates to strong support and resistance

The basic concept of the Crotch strategy is that strong support and resistance are levels that caused the price to reverse trend. As soon as we can see the price has reversed trend we go back and draw the strong support and resistance level using a box/rectangle and extend that rectangle out to the right. Strong support and resistance levels can be used in the future for trading and analytical purposes.

I am willing to short at strong resistance, with a stop loss just above the strong resistance area. I also typically refrain from going long, with other strategies, right near strong resistance.

I am willing to buy at strong support, with a stop loss just below the strong support area. I also typically avoid going short, with other strategies, right near strong support.

While orders can be placed in advance, anticipating that the strong levels will hold and cause the price to reverse again, a better method is to actually wait for the price to stall and start reversing in the strong area. Once it starts to reverse (consolidation breakout or engulfing pattern), take the trade. This helps avoid those trades where the price keeping running through the strong area and quickly hits the stop loss.

More advanced profit taking methods will be discussed in a future video, but for now, using a 2:1 or 3:1 reward to risk ratio will serve you well in making sure that your winners are always bigger than your losing trades.

Sources & references
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Cory Mitchell
Market Analyst
Cory is a Chartered Market Technician (CMT) with more than 17 years of trading experience. He has written for multiple publications across the financial sector, and… read more.

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3. Strong support resistance crotch
a. Strong Support/Resistance Crotch Trading Strategy – (Vid. 3 of 6)
4. Position size and risk management

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